Third-party, over-the-top (OTT) video services are easy to access over the open Internet and are increasingly popular. OTTs such as Netflix and Hulu are feared by pay-TV providers because they have potential to displace traditional linear cable and satellite, as well as telcos’ IPTV offerings. In addition, telcos have to deal with the exponential traffic growth generated by the OTTs, which is putting a significant strain on their networks
Nonetheless, the growth of OTT video is accelerating the development of the multiscreen market and presents new opportunities for telcos to differentiate their services, increase customer loyalty andgenerate revenue.
This is according to latest Pyramid Research report which examines the growth of OTT video services and the impact on the traditional pay-TV market. Key findings from the study are:
- The way the pay-TV market is evolving in the US shows two key trends: At the network level, data-hungry OTT video services are filling up operator pipes as OTT users are consuming more video and are watching it in higher quality and on multiple viewing platforms.At the service level, more users are opting for OTT services over traditional pay-TV alternatives, putting cable, satellite, terrestrial and IPTV providers under competitive pressure.
- Telcos can benefit from the growth of multiscreen/OTT by becoming technology providers to content owners, distributors, OTTs and other operators. Through operator-managed intelligent content delivery via CDNs, operators can regain control over their own access and monetize the demand for multiscreen/OTT.
- The growth of OTT is pushing telcos to further enhance their IPTV services with more screens. The key business driver for multiscreen IPTV is not incremental revenue, but rather customer loyalty. Thereare, however, opportunities to generate incremental revenue from IPTV. Multiscreen helps
operators to migrate customers from lower-value packages to higher-value multiplay bundles.
- Besides IPTV, operators are offering their own multiscreen/OTT services as well as third-party OTTs to monetize network investments. Telco OTT services present a cost-saving opportunity because they use the open Internet for content delivery. They also offer operators an opportunity to generate incremental revenues by targeting non-customers as well as existing customers.
You may read more about this Pyramid Research Report on their site.