Trends show that Over the Top (OTT) services that provide TV and other video content over an un-managed broadband connection are preferred by the tech-savvy population and are the drivers the cord-cutting revolution.
We have written some decent amount of posts on the emergence of OTT providers and their success. Now let’s discuss the upcoming challenges for those type of services and analyse the existing bottlenecks that still bother end-users and content providers.
OTT is by no means a one-size-fits-all solution and there are many challenges that impact providers. Digital rights management is a significant obstacle; the demand for the best quality content has led to protracted and challenging negotiations with current content holders. This process seems to be easing, if only slightly, as creases in the industry begin to present themselves.
Beyond content acquisition, the importance of a centralised hub for customer relationship management cannot be overstated. Without continually pursuing the most current, intuitive and thus, stress free interface for users, churn will be definite.
Churn is one of the largest challenges in the telecommunications industry. The relationship management between broadcasting and telecom will play out, inevitably. Either warring or marching in unison, these industries will meet in the world of OTT.
Further challenges of monetisation, finding the proper business model that provides a universal solution, integrating multi-screen services, tracking and understanding consumer behaviour are prevalent. Consumer behaviour is top of mind because with the transformation of television from a pull to a push industry, the focus on the end-user is intense. The industry can only be described as user-centric; returning again to the idea that understanding your audience is imperative revenue.
OTT is definitely the future of streaming. Its viewers outnumber IPTV this year and 380 billion people will view OTT content by 2015 compared to only 163 million to be using IPTV managed content.
The average weekly OTT TV is growing immensely, especially in the US (see figure). This begs the question of how Pay TV and the new Pay TV can merge seamlessly. Aforementioned is the example of HbbTV operators like HBO offering linear TV everywhere in an effort to adapt and grow. Providers and operators could also move into pre-loaded or downloadable apps in SmartTV sets, game consoles or set-top-boxes.
There are many approaches but the common refrain is to return to your customer to find the answer that is best for your business.
You can find more information on monetization of connected entertainment environment in the recent MPP report.