China's Tri-network Integration Policy, which is made up of three TV broadcasters, has eased restrictions on its broadcasting and telecom industries and allowed them to offer each other's TV services. This has brought new competitive challenges to the local video market, especially for Internet video and TV, which has expanded at a scale and speed surpassing that of other countries. Will China be able to replicate global TV behaviours?

 

Over the last decade China has revolutionised its telecommunications sector. In 2005 China’s telco market was roughly one-third of North America’s, but now they are almost equal. China’s Internet Service Providers (ISPs) may not have caught up to local telecommunication providers as quickly, but they are continuing to deliver faster and more efficient online services. Working with telecommunication providers, China’s OTT service providers have evolved from competitors and now engage in ‘coopetition’, where each side finds its niche in the ecosystem and cooperates when necessary for the development of both industries.

For media consumers aged 14-25, streaming video for immediate playback is more popular than viewing live content. Streaming technology has evolved in recent years and is faster and easier than before. In 2015, the Global Web Index found that 15% of TV watchers owned a streaming device, and with improved technology and accessibility – this number is thought to have grown substantially in 2016. What effect is the popularity of streaming having on over-the-top (OTT) and video-on-demand (VOD) use?

 

Last year, reports showed that prolific OTT service providers were struggling to maintain their initial rush of subscribers: video-streaming service Netflix failed to achieve forecasted subscriber additions. However, in 2016 Netflix surpassed 75 million subscribers and experienced exponential growth outside of the US, suggesting VOD is still a popular way to watch TV. Netflix remains the most popular provider, but Amazon Prime Instant Video also saw its subscriptions rise by 5% from last year, and NOW TV by 2%.

Until recently streaming live TV and delivering video on demand (VOD) services has been out of reach for corporate communications teams. However, in light of advancements that include increased bandwidth capacity, 4K screen technology, and costs that continue to reduce year-on-year, broadcast systems are experiencing daily use in a host of new environments. IPTV is considered a consumer offering and is often overlooked as a business application - why should companies choose to deploy its systems?

 

IPTV platforms empower corporate environments to create a TV experience that can be personalised by brand and deliver regional content – services specifically designed for large businesses. An example of this is our Perception platform which has implemented features such as regionalisation, CDN and multimode functionality to provide companies with a practical IPTV solution.

2016 is set to be a big year for sport: Rio de Janeiro will host the next summer Olympic Games and European football fans will be treated to the UEFA European Championships. TV sports packages are more impressive than ever before, with pay TV providers delivering sporting events in HD quality and with low cost subscription fees. With increased migration from pay-tv to online OTT services, how will viewers be watching sports this summer?

 

In the battle between pay TV customers and cord cutters, sport is one of the biggest barriers. People are reluctant to cancel traditional TV contracts because they do not want to compromise the quality of their sports viewing. With consumers unlikely to rely on OTT platforms, pay TV providers are blurring the lines between TV and online, introducing crossover services. For example, the PGA Tour live app costs $4.99 a month and allows users to stream rounds from highlighted groups of golfers before broadcasts begin. While Yahoo now streams live NFL games across all Yahoo apps and websites for free.

In recent years Internet Protocol television (IPTV) has become increasingly popular. Millions of TV watchers around the world are adopting the platform in an attempt to reclaim control of content and scheduling. IPTV services provide viewers with non-linear viewing through catch-up TV, streaming and network PVRs. While IPTV has dominated the global TV space, it was not until recently that Korea began to fully integrate the service into its own viewing habits.

 

Korea Telecom, and similar providers of television in South Korea, had to negotiate difficult regulatory issues and broadcaster usage agreements before the launch of IPTV was permitted in 2009. There were then issues with securing online content, with Korea Telecom struggling to obtain content carriage agreements with national broadcasters of Korean TV.

Since the introduction of OTT and the increased accessibility of TV streaming and online video services, there has been a notable divide between generations and their preferred viewing habits. Millennials have been blamed for a decrease in traditional TV subscriptions, while older generations have been praised for their loyalty to TV providers. However, research from Adobe and the Diffusion Group has found that almost half (42%) of adult TV viewing is through streamed content, signalling a significant crossover into OTT territory.

With the TV landscape becoming increasingly competitive, media companies are constantly vying for attention, engagement and audiences. It is crucial for media proprietors to understand the viewing patterns of their evolving consumer market. Despite claims that adults are remaining loyal to pay TV, the Adobe study found the streaming of content to be an increasingly popular pastime with older generations. 65% of the time spent engaging with OTT services on home TV screens is enjoyed through subscription video-on-demand (SVoD), 30% is spent watching free streaming services (FVoD), and 5% is spent watching transactional streaming services (TVoD). iTunes, Google Play, and Amazon Instant View are the top three transactional streaming video services. While 82% of adult video streamers have even subscribed to a form of online subscription video service.

Ten years ago virtual reality (VR) technology was a futuristic concept reserved for films. However, VR has quickly become a reality and is emerging as a popular add-on for video games and short films. Within the evolving film and TV landscape industry professionals expect VR will soon reach more mainstream audiences through broadcast television.

Despite industry focus surrounding the implementation of HD and 3D into TVs, the immersive nature of VR offers a seismic shift that is far beyond what current technology can offer.

The latest quarterly Multiscreen Index report from informitv reveals the highest overall rise in the number of pay TV subscriptions around the world for two years, with most operators gaining subscribers in 2015. Can the pay TV industry compete with the giant that is OTT?

The 100 pay TV services included in the informitv study gained a total of 8.16 million subscribers between them last year, an increase of just more than two per cent. Although the increase is relatively small, the findings contradict predictions of pay TV succumbing to a cord-cutting generation.

Sky recently announced its online TV streaming service, NOW TV, is to launch its most advanced set top box later this year. The brand new smart box will bring together NOW TV’s wide range of pay TV content and more than 60 live free-to-air channels. As the changing TV landscape is set to be dominated by OTT platforms, can pay TV services compete with their own streaming devices?

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Using Perception, our customers can watch television when, where and how they want, with innovative, eye catching features and immense choice. Perception is there every step of the way, giving the scale needed and an expanding feature set to ensure that T-2’s services stand out as the best in a highly competitive market.

Sašo Todorović, CEO, T-2

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