InfoCom updates OTT threat rating and says that carriers can turn OTT content into an opportunity.

OTT content challenges the traditional model of delivering TV-based content — Network providers may benefit from an opportunity gap — Monetising on the access highway likely be the future business model.

(PresseBox) ( Stuttgart, )
Stuttgart, Germany and Manila, Philippines — InfoCom’s threat rating for OTT content aggregators went up from low to moderate, after only a year from the previous evaluation. OTT content aggregators improved their limited content offerings — an issue, which impacted InfoCom’s previous evaluation — through partnerships with various content producers, which increased the content available on their platforms. Sony, for instance, is to form a partnership with live TV broadcasters in the US, to be able to bring live TV programmes into their connected TV sets.

Additionally, advanced content, such as 3D programmes, starts to be available as OTT. 3D content solutions provider Sensio, for instance, is launching a 3D VoD service store (called 3DGO!) that can be accessed via any 3D-enabled device. 3DGO!, — to be launched mid-2012 — will feature a collection of 3D dedicated programmes. 3D TV manufacturers could therefore be interested in partnering with Sensio in order to expand their own OTT content collection. Compared to TV access providers, OTT content aggregators’ advantages lie in their “no-frills” subscription model – free to access, no subscription lock-in periods and premium content is typically pay-per-transaction — and, accessibility — available with Internet connected TVs and, for price sensitive consumers, with STBs. “Besides”, an Analyst at InfoCom commented, “it is expected that the price of Internet-enabled devices will decline, thus making the devices more attractive to users”.

“In our evaluation, though, one of the most important criteria is quality of service”, the Analyst continued, “an issue that OTT providers cannot address as they have no own broadband infrastructure”. This fact is a real opportunity gap: network operators and broadband access providers can leverage on their existing networks to address growing threat from OTT content aggregators. Monetising on the access highway while competing with a new breed of rivals (OTT aggregators), similar to Etisalat’s and SingTel’s strategies, may likely be the future model of these players. “Telecom operators and CaTV providers with broadband networks will benefit from this as they have the infrastructure to execute this strategy. Etisalat and Singtel, for instance, have started their own OTT content apps stores independent from their IPTV offers”, the InfoCom Analyst commented further. IPTV and CaTV packages will still be offered along with OTT content and broadband bundles, similar to Singtel and Etisalat strategies. However, OTT content will not be offered as an add-on to the traditional TV platform packages as several TV access providers have been doing as a quick or “band-aid” response to the growing OTT content threat. Rather, it will be a standalone service packaged with a broadband service. This subscription model hopes to target and bring in revenues from heavy broadband and OTT content users.

The TV-based content delivery business is, currently, mainly a walled garden where the TV access providers have the full control of the content delivery through their respective networks. With this set-up, content producers generally have no direct contact with the subscribers. TV access providers (including network operators, as IPTV providers) and content producers partner only for content: the TV access providers aggregate content into a package, distribute it and bill the viewers. Basically, TV access providers control the entire value chain and therefore also a large portion of the content streams. The OTT content players aim to change this approach and are now aggressively looking for ways to access directly the TV households, in order to secure a larger share of the content revenues.

About this extract: This extract is based on an article of TS&T – Telecom Strategies & Trends, InfoCom’s highly analytical telecoms publication. This ejournal provides in-depth articles on a wide variety of compelling innovative topics. Each issue contains up-to date rigorous analysis. TS&T is available as an annual on-line subscription providing 24 issues throughout the whole year. If you are interested in this publication, do not hesitate to get in contact with us. Talk to us. We listen.
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