OTT and the Challenge of Live-Linear Channels
The growth of over-the-top (OTT) video delivery has been nothing short of spectacular. In the last 12 months alone, OTT has grown to $9–12 billion in global revenues, with $1.9 billion of those revenues coming from emerging markets, according to a report from PWC. In fact, international viewership is now estimated at 19.4 million viewer households.
A new report on the growth of OTT—and the challenges faced by OTT service providers—was released today. Titled "Over-the-top Video Delivery: Challenges and Opportunities for Global OTT Service Providers," it was produced by Unisphere Research and Streaming Media magazine, sponsored by Level 3 Communications, and crafted by Transitions, Inc.
"OTT video delivery is making a marked impact on both the broadcast and streaming industries," the report states, "driving consumer and technologies shifts in media consumption. These shifts have fueled a myriad of solutions to the technical and security challenges—and even some monetization barriers—that often prevented premium content owners from entering the OTT-video market."
Several key issues that have been addressed, though, are clearing the way for a new wave of OTT service providers.
"With global CDNs, more affordable mass storage, adaptive bitrate video compression technologies, and the widespread adoption of high speed internet and 4G LTE wireless data, the OTT opportunity is growing faster than ever," said Tim Siglin, co-founder and principal analyst of Transitions, Inc.
Siglin noted that a large number of respondents see OTT as a viable revenue opportunity today. Even for those survey takers who indicated they’ve not yet moved to offer OTT services, there was a strong understanding that it’s not longer just a video-on-demand (VOD) play.
"Additional responses indicate that offering both video-on-demand (VOD) and live-linear channels will be critical for OTT providers to entice new prospects and gain market share," the report states. "This trend is a critical one. For existing OTT providers, offering a VOD service may not be enough to maintain, much less grow, market share."
The trend towards adding live-linear channel content has the potential to become "table stakes" in the OTT game over the next several years, with both breaking news and live sports content leading the way in terms of interest for OTT service providers adding live-linear channels.
Survey respondents highlighted the delivery protocols they currently support, and Apple’s HTTP Live Streaming (HLS) was the clear winner at double the support of any other protocol.
For those respondents working for companies which offer OTT services today, the use of HTTP Dynamic Streaming (HDS) from Adobe outranked Smooth Streaming and Adobe’s RTMP protocol.
At the low-end of the supported delivery protocols, MPEG-DASH received approximately 29% support from those offering OTT services today.
Live-linear content requires significant security infrastructure, given the timeliness of the content and the propensity for smartphone app streaming at live sporting events such as the Floyd Mayweather-Manny Pacquiao fight, as called out in a recent ESPN story.
"We are going to seek whatever remedy we have to go after people who essentially stole our product," said Todd DeBoef, president of Top Rank, which promotes Pacquiao. DeBoef very specifically noted concern “about the amount of people who were streaming and watching the fight through Twitter's live-streaming app, Periscope”.
In addition, the OTT Services report notes that authentication tools need to be at the top of their game. For the Mayweather-Pacquio fight, authentication issues caused almost an hour delay in the “Fight of the Century” as technicians scrambled to resolve the issue for this $100-per-view event.
The good news, according to the survey, is that there's another parallel trend: growth in the number of live-linear channels being acquired over fiber, versus the recent past, in which satellite downlink live content acquisition was the preferred method.
"This shift in how broadcast quality channels are received, from satellite to fiber backbone, is critical in all types of live-linear content, including sports content," the report states.
In other words, broadcast quality acquisition is equally important for OTT delivery as it has been for traditional broadcast delivery.
Click here to access the report, and here for more Streaming Media/Unisphere research.
New survey asks industry members to weigh in on the state of OTT today and share their insights into where they see the market headed in the future
The 2015 OTT Superguide Is Now Available