OTT to trot in emerging markets

Joseph O'Halloran | 30-05-2013

The potential for telcos in emerging markets to prosper from over-the-top (OTT) services is strong as long as they address content, technology, partnerships, payments and regulations, according to a new report from Pyramid Research.

The report Five Factors Driving OTT Video in Emerging Markets: Best Practices for Operators which looks at the growth of OTT video in markets across Latin America, Asia-Pacific, Asia Pac, Eastern Europe and the Middle East identified content as the most important factor for OTT success, with changing conditions in the content licensing market opening up opportunities in many emerging markets.
In identifying market drivers, Pyramid says that there is growing interest among content owners in expanding presence beyond mature markets and partnering with OTT providers. This was said to be due to the fact that the increasing saturation and concentration of content rights in developed markets is pushing global content providers to look for new opportunities to license their products, on traditional as well as on OTT platforms. At the same time, Pyramid observed that in mature markets, content providers are aware that directly embracing the OTT model puts them at risk of cannibalising their existing business with pay-TV providers.
Pyramid added that contrary to received wisdom, legacy broadband infrastructure was not necessarily a strain to OTT video growth, suggesting that telcos are in a position not only to cope with the growth of third-party OTT but also to launch their own services. Indeed Pyramid asserted that by deploying fibre (FTTx) networks, telcos were in a better position to compete against cable and satellite providers. That said, Pyramid noted that with intelligent caching, CDNs and adaptive bitrate streaming, fibre is no longer a must-have in order to deploy a video service over a broadband network.
"In emerging markets, the OTT model is enabling telcos, pay-TV providers and media companies to respond to the demand for video streaming services on multiple viewing platforms, from laptops and mobile phones to the latest connected devices," says Daniele Tricarico, analyst at Pyramid Research.