An Evolving Video Landscape

An Evolving Video Landscape

As companies expand their OTT vision, it is clear it will continue to grow rapidly, offering opportunities for expanding audiences, content, and revenue – whether the needs are local, regional, or global.

There has been a rapid surge in the demand for over-the-top (OTT) videos, particularly in developing economies. TV digitization initiatives by various regional governments and broadcasters across the world have enabled OTT content to emerge as the popular platform for video consumption. The rising penetration of mobile devices, such as tablets and smartphones, and advancements in consumer electronics devices are estimated to drive the demand for OTT content and services amongst the masses over the coming years. The global OTT devices and services market is expected to reach USD 165.13 billion by 2025, according to a new report by Grand View Research.

Various sectors are increasingly seeking contemporary technological models to provide personalized experiences to their customers, such as TV access on smartphones, connected devices, and tablets. Content providers and broadcast service providers are leveraging the benefits of OTT technology to enhance customer engagement by gaining in-depth insights about their customer base.

Indian Scenario – Regulator’s Approach

India provides a huge opportunity for online video providers. Apart from the traditional OTT players in the market, major broadcasters in the country have also invested in this segment and launched their own OTT platforms. The main hindrance to the OTT market in the country is the average price for cable and satellite subscriptions, which limits subscription revenues for OTT players.

Currently, there is no specific law to regulate OTT services in India. Considering that internet penetration is still evolving in India, access speeds are generally low and there is limited coverage of high-speed broadband in the country, TRAI is contemplating whether the OTT services should be regulated or brought under the licensing regime at this stage.

According to TRAI, there are also certain public policy issues associated with OTT services, such as regulatory imbalances, impact on the economy, and security issues. The telecom service providers (TSPs) fall under a regulatory regime, while OTT players are simply bypassing such a regime. Anoop Narayanan, Principal, ANA Law Group asserts that “the regulator is concerned whether the growth of OTT is affecting the traditional TSP revenue stream, and if so, whether the increase in data revenues of the TSPs will be sufficient to compensate for this impact.”

In India, the network infrastructure is still at an early stage of development, which is a major challenge for OTT service providers. Therefore, with increasing debates between the OTT service providers and the TSPs, the TRAI prepared a consultation paper in March 2015 to invite public and industry comments on the proposed regulatory framework for OTT services in India. The feedback provided by people and the industry is not available publicly, and therefore, one has to wait for TRAI’s decision on regulating OTT in India, and at what stage.

Notwithstanding, it is abundantly clear that the government is concerned that crucial consumer data as well as national security information may be compromised by the fast-paced proliferation of applications on mobile phones. The DoT has recommended steps to regulate and monitor content on mobile applications, including location of data servers in India. Further, the DoT has proposed putting in place interim provisions enforceable through licensing conditions, until an appropriate legal framework is enacted.

Infrastructure Challenge

The biggest issue that OTT providers continue to face in 2017 is of infrastructure – and unlike with cable providers who had traditionally built out their delivery network, OTT providers must rely on what is already in the ground or on utility poles. Infrastructure is clearly a problem, but it is not something broadcasters alone can solve – how to get that high-bandwidth delivery method to every home is yet to be resolved.

Already there are issues with high-profile events, and live content – including sports – that could become more problematic, especially as there is so much bandwidth available in the pipe.

Content providers can make the best-of-breed arrangements including CDNs, origin bandwidth and storage, consumer app; but ultimately the performance of delivery of content over the internet is not guaranteed. Among the uncontrollable elements in the delivery of TV content over the internet are choke points where packets are delayed or dropped, especially with popular live content. Fortunately this is an issue that ISPs are already striving to resolve.

The infrastructure players are actually ahead of those on the broadcast side, and within the next year or two they might come up with more seamless processes to handle the increased bandwidth of traffic. Right now it is very complex as there are too many moving parts with systems that could be integrated.

One solution to address the bandwidth issue could be content delivery networks, which limit how far the content will need to be streamed. In this way it will be closer to the viewer and address some of the network latency especially at peak viewing times. This could enable servers that are not much larger than the size of a DVD player to maintain an entire OTT platform’s library of content.

In the short term however, this would not be so much about adding more routers and switches, but rather, replicate the content closer to the viewers. The last mile is not the real problem with OTT. Most people have enough bandwidth today to watch this content. It is increasingly the distance to the source. The model however gets harder for fringe content.

To make all this possible, local channels will also have to be OTT-ready, but other issues will need to be addressed, as well. The content rights need to be resolved, either by replacing content embargoed for streaming, or by decorating the channel, such as by adding in-band streaming restrictions.

The broadcast network and the local broadcasters will have to collaborate to be successful. In the United States, the trend is to use SCTE-224 and SCTE-35 in tandem as a way for networks to decorate channels and send content rules to the MVPDs. One of the major players, Harmonic has currently deployed such a solution for one of the big broadcast networks, using a hybrid on-prem and public cloud architecture.

The key to all this is satisfying viewers who want to find their content on the most convenient platform.

Industry is still at a place where lot of the content that is available on one platform is the same content that is available on another and there is going to be an opportunity, especially in the case of mobile, about ways to use those platforms as funnels to a TV experience.

Way Forward

The growing demand for UHD OTT streamed content is disrupting broadcasting. Mobile and social video are driving online content consumption growth with OTT viewership expected to exceed traditional viewing by 2020. According to Cisco VNI, mobile video traffic already accounted for 60 percent of total mobile data traffic in 2016 and by 2021, 78 percent of the world’s mobile data traffic will be video. This fundamental change in consumers’ behavior brings great opportunities for media companies searching cost-effective ways to deliver high-quality content across a broader range of devices. As companies expand their OTT vision, it is clear it will continue to grow rapidly, offering opportunities for expanding audiences, content, and revenue – whether needs are local, regional, or global. OTT service providers across the globe are focusing their efforts on the development of the three key streaming technologies that include high-dynamic range (HDR), 1080p content, 4K streaming, and virtual reality (VR) video. OTT players are upgrading their processes with new innovative technologies and offerings to provide advanced online services.

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