The 2011 OTTCON (Over the Top) conference was a good opportunity to hear some of the current thinking and see some state of the art solutions that bring video programming to consumers via the Internet. While the comment that customers want their content on “any device, anywhere, at any time, over any access” has been overused, it is indeed true. Service providers who do the best job staying in front of consumers as they move to other screens – while preserving existing business models and establishing new ones – will gain competitive advantage.
No longer are people asking whether OTT will replace pay TV. Instead, they are asking how one can complement the other for mutual benefit. But it’s still somewhat unsettled as to how OTT content will be monetized to a sufficient degree that OTT ad revenue streams would offset the loss of traditional TV ad revenue.
OTTCON also posed a fundamental question: “what is a service provider in the age of OTT?” Three Internet-enabled provider categories have clearly emerged. The first are the traditional pay TV companies, which are now striving to complement their managed services by delivering Internet-sourced content, both to their managed devices, and to outside devices over the Internet.
The second category is the delivery of content to connected consumer electronics devices – via the open Internet – either directly from content owners like the TV networks, from portal providers like Netflix that aggregate movie and TV content – and/or from Hulu which is both. The consumer accesses this content through apps that reside on the device.
The third type of service provider approach is ecosystem-based, in which a single provider builds a closed content delivery service platform using an interdependent range of devices and software, combined with a content and apps marketplace. In this approach, the provider can offer increasingly common set of user experiences within the home, online and across multiple devices while providing a compelling channel to market for content providers – and even other service providers.
The next few postings will look at these in turn and identify some opportunities.