23 January 2017

Service providers start to prioritise OTT

Traditional service providers are waking up to the importance of OTT applications in their TV offerings. Over the last decade service providers have introduced video-on-demand services to customers, but OTT content is now being favoured over traditional satellite offerings.

 

In ABI Research’s ‘Service Provider OTT Services & OTT Set-Top Boxes’ report, forecasts expect live linear OTT video services to grow to approximately $7 billion dollars of worldwide revenue by 2021, increasing from just $1 billion in 2016.

 

These market predictions have caused service providers to take action. According to ABI Research OTT technologies that can compete with Amazon and Netflix are receiving the most marketing investment, and are now favoured over satellite products.

 

Consider HBO, an American premium cable and satellite television network that is also the leading streaming video on demand (SVoD) service for customer satisfaction. The research firm found that HBO Now ranked highest for customer satisfaction in 11 of 14 categories against the likes Netflix, Hulu and Amazon Video.

 

HBO Now came out ahead in specific categories that included: amount of content; availability of past season’s TV shows; ease of discoverability; quality of original programming; and number of blockbuster movies.

 

In the UK, the BBC has announced its BBC iPlayer application will be reinvented in a bid to be the “number one online TV service” in the UK by 2020. The broadcaster’s director general Lord Hall explained that the BBC’s new charter period is an attempt to “reinvent public broadcasting for a new generation” and the iPlayer needed to make the leap from a catch-up service to a must-visit destination. Changes will include allowing entire series to be downloaded before they are shown on television and viewers will be able to binge watch box sets - features which Netflix and Amazon already offer.

 

With the BBC and HBO focusing on improving their OTT offerings, it is clear that pay TV is no longer prioritised. Streaming is now globally recognised and service providers are focusing on developing their customer offerings and competing with profitable OTT providers. However, despite HBO Now’s high customer satisfaction and BBC iPlayer’s increased popularity, subscribers still rate Netflix as the top OTT service on the market. Service providers that have cable legacy issues are having to work harder to adapt to the modern TV landscape. The first step for service providers is accepting the decline in pay TV and re-prioritising investment. It is only then that they can compete with the OTT leaders and enter the lucrative streaming market.

 
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Sašo Todorović, CEO, T-2

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