// OTT Video: Coming to a Paid Channel Near You

Date: 08/01/2013

Contributors: Joe McKendrick


As it moves into the mainstream, over-the-top (OTT) video is maturing towards a pay environment, with sustainable business models. Premium content delivery is becoming both a more significant component of the overall online video business and a more dominant mode of video delivery.
OTT, in many cases, is just a technical substitute for traditional TV delivery—consumers don’t care which pipe information and entertainment comes from, provided the service delivers the content or channels they care most about in a convenient form.Consumer households, as viewed by pay-TV service providers,are quickly evolving into multi-screen environments. Subscribers access video and other content not only from their television sets and set-top boxes, but also their tablet computers, PCs, and smartphones.
Video content is not just consumed within the confines of the home either—increasing numbers of consumers are demanding more of the “everywhere” aspect of TV—watching live or catchup programs on-the-go. The traditional set-top box tethered to the television set, once the center of consumer home-based entertainment, is now but one shared video device in a multiscreen world of personal delivery options.
These are some of the findings of a new StreamingMedia.com survey of 758 media industry executives, which sought to uncover their views on the current and future state of OTT video from inside the trenches.

Key findings include the following:

  • Over-the-top delivery is a growing business driver for the industry—Perhaps in large part because of the trend above, both the number of companies involved in OTT delivery will grow and the proportion of those businesses substantially invested in OTT technologies will more than double over the next three years.
  • TV is taking over the Internet (not vice versa)—The pay model for OTT services is seen as growing in dominance compared to a free or advertising-supported model. This is a very significant change of perception for Internet video, which was initially interpreted as a free alternative to traditional TV services.
  • There’s a new big screen in town—The tablet has established itself as the new viewing device of choice, according to respondents, although executives are aware that device preferences are changing rapidly, and that many types of technologies and formats will need to be supported within today’s multi-screen environment.
  • The Internet is not big enough yet—Bandwidth and quality issues are still seen as significant technology challenges by respondents. Video on demand, using HTTP Live Streaming (HLS), is now the most prevalent type of service, but executives expect to see more services focusing on linear content—the streaming of live events, especially where social networking capabilities are seen as a key piece of OTT offerings.
  • Challenges with gaining multi-screen content rights—Obtaining broad content rights to stream video to multiple screens is felt to be a significant business growth obstacle. The legal and legislative tangle is especially thorny in the U.S. market where there is ambivalence to breaking traditional business models.
  • OTT video security—Encompassing stream protection and digital rights management (DRM) is a murky area for many organizations to navigate. A transition away from proprietary technologies, such as Flash, has created a landscape of options. It appears too early in the lifecycle of MPEG-DASH to see how this might help unify infrastructure and consumer electronics configurations.

OTT VIDEO: COMING TO A PAID CHANNEL NEAR YOU was produced by Unisphere Research and sponsored by Verimatrix, Inc.