28 TVBEurope Special Report: OTT Multiscreen
www.tvbeurope.com September 2014
What’s next? T
he value of content is undoubtedly the television industry’s primary asset and it is driving the availability of over the top (OTT) services. From a consumer standpoint, the growth in popularity of OTT services is obvious. It is a compelling user proposition: an offering of unprecedented choice and more convenient access to content.
IP: an industry imperative that will enhance the consumer experience Ericsson research suggests that by 2020 there will be over nine billion people on the planet, with eight billion having access to IP and mobile broadband. IP will become the predominant method of distribution and will have a long-term impact on the OTT space. One of the key findings from our Media Vision 2020 project is the assertion that the delivery of content over the top will become applicable to all TV service providers and content owners as a way of reaching consumers. IP offers broadcasters a means to extend the reach to consumers outside of the traditional operator ecosystems fed by local and national content.
This issue’s special report offers a series of exclusive insights into the world of OTT services and technology, painting a picture of the current and potential future landscape for multiscreen development, consumption and monetisation. Thorsten Sauer, head of Ericsson Broadcast and Media Services, opens our report by examining what’s next for OTT
In a very complex market, where 15 billion connected devices will be video enabled, the importance of multi-screen services and platforms will only grow. Today’s entertainment experience encompasses a variety of consumer devices, ranging from the handheld mobile phone through to a 4K living room TV screen, all of which are connected and enabling content to be available anywhere, at any time. Consumers are demanding an inherently flexible, social and more personalised TV and video experience. This is creating a number of new viewing habits, with sustained higher viewing levels throughout the day. The Media Vision 2020 research suggests that consumer consumption patterns in advanced markets will shift towards a 50- 50 split of time spent with on-demand and time-shift versus linear and live TV within the next six years.
Increased competition in the OTT space
In the last decade there has been a dramatic increase in competition in the TV space, illustrated by the growth and influence of aggregated OTT services such as Netflix, Hulu, Amazon Prime,
YouTube and Apple TV. As the internet becomes an increasingly ubiquitous distribution channel, the rise of these new players and the offering of streamed content over unmanaged networks will only accelerate further. These new industry players have the competitive capabilities of being able to break down the barriers to entry around connected devices.
The presence of these new entrants has bolstered the cost of acquiring or producing original content. As more bidders come to the fore, traditional broadcasters are being forced to reassess their business strategies. For instance, the worldwide successes of exclusive Netflix productions such as House of Cards and Orange is the New Black have attracted large loyal followings and gained worldwide critical acclaim. During Ericsson’s NAB Show Super Session on TV 2020 earlier this year, the session panel moderator, Colin Dixon, founder and chief analyst of nScreenMedia, commented that Netflix alone has grown to 44 million paying subscribers in just seven years and based on its current growth trajectory, it will have 200 million subscribers by the year 2020.
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