OTT content: threat or opportunity?
Written by Chris Forrester
Sunday, 07 February 2010 04:39

Some pay-TV operators are extremely anxious about the threat from Over The Top (OTT) supply of content to their business. OTT was high on the agenda at Rapid TV News’ Round Table on Conditional Access.

The theories are simple enough. If viewers can get zero or low-cost access to catch-up TV services such as the BBC’s iPlayer, or YouTube, or if a powerful organisation like Sony which has access to its own Hollywood studio content and runs a vertically integrated business right down to its own TV sets, then who needs set-top boxes, or pay-TV aggregators?

Steve Christian, VP/marketing at San Diego-based Verimatrix, said that for his clients attack was the best form of defence. “I think that the strong relationship that a pay-TV operator has, whether to a subscriber or subscriber household, [is the best form of attack]. Opinions can vary about the actual threat that Ethernet-delivered video, OTT video poses to that kind of relationship, but it is inevitable that the more screens there are in a home, the less people who will actually be watching the main source of video in the living room. The main concern is where are those eyeballs going? Are all the people capturing those transactional and appetizing revenue streams that rightly belong to me, the guy with the main relationship? And so the attack factor here is to actually offer services under the umbrella of the pay-TV subscription relationship. To actually target those additional screens and supply a monetised OTT offer combined with the traditional pay-TV offer, which becomes the next kind of Holy Grail of service delivery, and that is the kind of thing that we are helping enable our customers to do.”

NDS’ Howard Silverman said there are many new entrants trying to elbow in onto this new world order. “The answer is quite simple, [which is] that the existing pay-TV operators can quite simply extend their existing offer to include OTT content. There are challenges with that. There is the whole new user experience, and you will be able to get more content and more operator content onto more screens. The challenge for the pay-TV market is to build and to extend the reach of the service offering to those additional screens. Now, at the end of day, we are looking at protecting premium content or valuable content whether it is live sport, or movies, or reality TV, and extending it to multiple screens. So, OTT can certainly play that role. I certainly see from where NDS is going, CA/DRM Solutions to cover that [activity], and our Middleware extends to include that kind of offering. It is in the market today.”

Graham Turner, VP/strategic marketing at Nagra Kudelski, says many viewers like these extra OTT services. “Regardless of whether you have extra OTT services or an adjunct to the services they get in the moment, it is very much a trend. Actually, I want to see the content that I want to see, where I want to see it, when I want to see it. The good operators will respond to that by providing start over and catch-up TV, for instance. Provided you can deliver what people need, then people tend to stay with an operator, provided they get the service they need and do not feel that that they are losing out. So, I think that there will be a tendency for the good operators will extend what they offer, and provide over the top content, they will provide the unified web to access OTT, and they will allow people to start over and catch up, and in that way those [services] might be over the top. Yes, there will be a nice demonstration in the store, ‘look at these widgets you have in your box anyway’, but if you have to go and get some of your movies from one studio, some from another, then suddenly you’re dealing with multiple providers.”

Alex Borland, director/business development at Belfast-based Latens, argues that in some markets OTT content is now generating huge viewer interest. “We know in the UK that the broadband networks across the UK were almost at breaking point because of the arrival of the BBC’s iPlayer. So, it is an incredibly important aspect to our business, and yes, I do see it as potentially defensive move by our traditional customers, the pay-TV operators. But also it is an opportunity, it is actually both. There are two main elements for a successful pay-TV operator to maintain his position and also to monetise and move forward with OTT services and gain further traction in this market and gain further market share. The two things are: very strong content strategies that look at how they can make or avail themselves with certain new types of content either through their own production, or either through partnerships with production houses, so that they can really maintain a call from the consumer’s face that says, you know, ‘I am offering something that is unique and different’.”