OTT video could save pay-TV, not kill it

21 Jun 2016
00:00

The next step: big data

Whichever strategy telcos pursue, one crucial requirement will be a change in mindset about the role of consumers in this ecosystem, O’Neill cautions.

“The industry needs to stop thinking that content is king and recognize that really consumers are king - consumers are driving this,” he says. “They have to make sure that the content has a great user interface, good discoverability, and increasingly they will need to use analytics to do something with all that data they’re collecting.”

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O’Neill says the role of big data analytics for any OTT video service cannot be underemphasized, because anytime-anywhere streaming TV isn’t the only way that TV consumption is going to evolve.

“You need to be able to know who’s watching,” O’Neill explains. “The companies out there that are basically panels and doing surveys aren’t giving you enough information, so how do you get the information you need and how do you make sure you can target advertising, transition into the OTT space and make it something that generates revenue and not just conversation?”

This is especially critical since much of the projected revenue from OTT video is expected to come from ads, not monthly subscriptions, he continues. “It’s a big deal being able to serve up ads for things that people are going to buy or pay attention to. This will be a big part of the success of OTT. Without it, is SVOD going to pay its way? If you’re Netflix, sure, and maybe some other companies to an extent, but in the end you have to finance it somehow and advertising remains the best way, though that could change.”

Why OTT unicast isn’t ready for prime time

One of the tropes of OTT video is that its default model of time-shifted on-demand viewing is making “prime time” broadcast viewing irrelevant. Steve Christian, SVP of marketing at Verimatrix, says that’s wrong, and that it matters because buying into that trope can lead pay-TV players to assume that unicast solutions for OTT streaming are sufficient to serve demand.

“A combination of multicast, linear and streaming provides the best user experience and also the best scalability of the network,” he says.

Christian cites this year’s Super Bowl sports event in the US as an example of why prime time isn’t dead, and why unicast alone won’t cut it.

“The households served by broadcast [during the Super Bowl] were roughly 100 million. The households served by unicast were 1.3 million peak - that’s several orders of magnitude between those two audiences,” he says. “That situation requires a combination of technologies, a synthesis of broadcast and multicast technologies and streaming technologies to best serve these kinds of situations.”

The Super Bowl also demonstrated how unicast streaming introduces latency issues, he adds “I actually measured the difference between the satellite transmission in my household and the unicast stream coming through my Amazon Fire TV stick. What do you think the difference was in terms of time? Thirty seconds. That may not seem like a huge amount to some people, but when you’re tweeting along with the game or you hear your neighbors cheer before you can even see what’s happening on the field, it’s a big difference.”

Christian admits the Super Bowl might be an extreme example, “but sports, reality TV, news, all kinds of things like that are still ultimately delivered in real time and consumed in real time. So despite the naysayers who would say that there’s only on-demand with personalized viewing now, there is still a prime time TV market, and we need to design solutions that meet those kinds of needs as well as the personalized delivery situations with OTT. Live unicast streaming doesn’t solve all the problems you have in real-world situations, and we have to live in the real world because we’re trying to serve real consumers with real content.”

This article was first published in Telecom Asia OTT Insights May 2016 edition

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