Strategic over-the-top (OTT) bundles will pave the way to innovation in 2016, according to the latest Ooyala broadband report.
Networks, pay-TV providers and mobile carriers are all looking at strategic ways they can make the most of their content and infrastructure to create compelling consumer service offerings ― particularly for millennials. Ooyala said that providers are going big on technology but also getting back to basics. They’ve realised that infrastructure, wired or wireless, is their competitive advantage and profit-driver, and that as screens get both smaller and larger, the consumer experience is key to survival.
“Maybe it’s time to stop calling them ‘cable TV’ companies. Connectivity is our No 1 product now; it is no longer video. That is a significant change to our model,” Cablevision CEO Jim Dolan said last autumn.
Ooyala runs down several moves in this arena. For instance, AT&T has partnered with Hulu for mobile and Internet customers, and several operators have launched their own Internet TV service. Cablevision has a cord-cutter package linking broadband, OTA digital antenna and in some areas, Wi-Fi phone service — with no video networks. The slimmed-down Verizon FiOS Custom TV bundle starts to give a glimpse at what a pay TV à la carte world might look like. And, Comcast's “mobile-first IPTV service,” Stream TV, which focuses on broadband-only customers without impacting their XFINITY data plans, has been rolling out in select markets.
Other regions are in the game as well. Live-streaming ITV Hub and the Freeview Play connected TV service are some of the UK’s new offerings in the space.
“All this activity makes it clear that the expansion of mobile and broadband network data capacity and connected screens is going to be critical for future revenues and growth throughout the sector,” the firm said in its report.
In Q4 2014 research, The Diffusion Group (TDG) estimated that the average weekly time US Internet users spent watching OTT TV would rise 425% between 2014 and 2020, from 3.6 hours to 18.9 hours. In 2015 alone, time spent with OTT programming was expected to nearly double to almost seven hours per week.
“OTT is undoubtedly part of the mainstream content experience now, whether it’s broadly or narrowly focused,” Ooyala noted. “The industry is experiencing déjà vu: harkening back to a time when broadcasters first faced the rise of cable. Look for re-aggregation of content and services by multiple players as competitors, partnerships and opportunities in the space expand.