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OTT And The Connected Home: The Future of Entertainment

Much has been said about the possible death of TV. This is not entirely true, but TV as we know it is being reborn. More and more homes now have access to a choice of Internet connected media devices, giving them access to content from a growing number of alternative video content providers.

There are now billions of connected devices in use globally, including games consoles, Blu-ray players, dongles and media streaming boxes, as well as Smart TVs. One of the main reasons for the popularity of these devices is the rise of providers such as Netflix and Amazon, with the raise in the number of Smart TVs largely due to consumer eagerness to upgrade.

What does this mean for viewers?

As the range of available devices grows so viewers have improved flexibility. They are able to watch their chosen content using a variety of methods. Choice is often dictated by ease of access, and quality of the viewing experience. Smart TVs and Blu-ray players are not always the most reliable when it comes to quality, as their interfaces can be unwieldy, and their video processors under-powered. Gaming devices are highly popular methods of achieving online connectivity, but a large majority of this access is restricted to gaming activity. Video streaming boxes, and the cheaper dongle option, have been filling the gap to provide easy and reliable access to online video streaming.

OTT services and Connected Home devices

One issue associated with these devices is the inability for viewers to access live linear and premium film and sporting event content. This has so far meant that viewers have used these devices in addition to their traditional Pay TV provision. This is set to change with the introduction of Sony’s PlayStation Vue TV service, launching this year, which will be able to compete directly with traditional Pay TV.

The battle continues

There is no end in sight in the battle of connected TVs. The lines are drawn between traditional TV providers such as Samsung, Sony and Panasonic, games console providers, and Internet giants Amazon, Google and Apple.

Currently Google’s Chromecast dongle is the most popular digital media streaming device globally, and Google’s position seems set to be solidified with the re-introduction of its own connected TV platform, Android TV, in partnership with several traditional TV providers. In addition, the Google Cast streaming technology has garnered a favourable reaction with app developers.

Amazon and Apple are making their own attempts to gain a hold in the video streaming market, with Amazon relying on its Fire TV streaming box and stick, and Apple rumoured to be launching its own OTT TV service later this year.

The growth of OTT

Previously there has been little disruption to the traditional Pay TV provision, according to a recent Strategy Analytics report,  Now the landscape is in place for this to change. Broadband provision has improved overall, and the number of people with connected devices has increased. These changes have enabled the rise of subscription video services, such as NOW TV. These providers retain strong ties with traditional TV providers in the European market, but products such as PlayStation Vue TV have the potential to be far more disruptive for the Pay TV market in the US.

The provision offers several advantages:

  • Taking into account all purchase costs, taxes and surcharges it’s a cheaper option.
  • The potential revenue streams are increased as gaming revenue streams are enabled as well as traditional ones.
  • Whereas viewers mainly get their STBs from Pay TV providers as part of the package, with PlayStation Vue TV they retain ownership of the STB.
  • OTT offers a more selective choice, as opposed to Pay TV which often provides an excess of unwanted channels.

What does the future hold?

The future is not without obstacles for OTT services in general; regulatory changes in the US are ongoing which may alter the landscape. PlayStation Vue itself does not provide access to Disney Network channels, or to premium channels such as HBO, Showtime or Starz; although this content can be access through services such as HBO Now, Netflix and Amazon. Whatever happens in the future of OTT it seems set to continue to rise in popularity, and to disrupt the traditional Pay TV provision.

This in turn seems set to only improve the viewer experience as many traditional Pay TV providers are embracing the rise of OTT with the inclusion of their own provision, such as Sky Now TV in the UK. Others are including services such as Netflix as part of their provision. This means that as OTT continues its rise, the viewing experience continues to improve.

According to iStreamPlanet’s Mio Babic, the next step in the rapid device and broadband proliferation continues to drive demand for all video content on all screens at all times. The transition from traditional television broadcast to connected OTT services is to provide a consistent, high quality viewing experience including access to breadth and depth of content, high quality video playback, interfaces targeted to viewing device, and seamless monetization, whether that’s via advertising, authentication, and/or subscription.

The trend lines of traditional broadcast television viewing and OTT viewing are set to cross in the near future.

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