Save your FREE seat for Streaming Media Connect this August. Register Now!

Video: What are the Economies of Scale for OTT vs. Broadcast Video?

What are the incremental costs of adding viewers for OTT, what CDN infrastructure strategies make sense for OTT services as they reach a certain scale, and which approaches fare best in the current economy? In this excerpt from their Streaming Media East 2016 panel, The Business of Streaming Television, trnrMedia's Jim Turner and Vimond CEO Helge Hoibraaten tackle these issues and more.

Learn more about OTT scaling at Streaming Media East.

Read the transcript of the clip above:

Jim Turner: OTT and IP-delivered video are different in that there's an incremental cost for every viewer that's added. Whether it's NBC Broadcast or whether it's even a cable network, you have zero incremental cost for adding a viewer, but that's not true in OTT. Talk a little bit about that and how that might affect the fact that these are all subscription services instead of ad services, because at least you're guaranteed the subscription.

Helge Hoibraaten: There is a lot more feasibility, economically, with doing subscription services. The prices you get and the loyalty you get from people to an ad service really, it's a bit of a struggle to get it, to be profitable.

The incremental cost of each viewer is a challenge for anyone doing OTT. Basically, it makes a lot of sense to go to the existing CDNs when you start and over-the-top service. It's a fast way of getting good-quality streaming video out there to the audiences. Once you hit a certain scale, you have to start thinking how can you decrease that cost, because that cost is now one of the biggest costs.

So basically, what we have done together [with iFlix]--and we have done this before as well and we did it in Europe as well--was building up your own CDN infrastructure. There is a sound economy to set up here, because you can put out boxes into ISP networks that will allow them to have better control over the streaming of their network infrastructure and giving you less of a cost. This is the way most CDNs actually sell in their data structure into the ISPs of the world. When you get to a scale of iFlix or others, you really can do that yourself.

Streaming Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues
Related Articles

Video: How to Make IP Video Better Than Broadcast

Cisco's Paul Dashner discusses how content providers can improve on the broadcast experience through the usability and flexibility of how they deliver content to customers.

Video: Are OTT Skinny Bundles Missing the Big Picture?

Vimond CEO Helge Hoibraaten argues that, as an industry, we're missing the point with OTT skinny bundles, aiming for incremental improvements over linear TV rather than anticipating what OTT viewers really want.

IPTV Is Dead and OTT Killed It. Will it Do the Same to Broadcast?

Broadcast television may well go away, with consumers and providers embracing over-the-top delivery. But several issues need to be solved first.

Video: How Do You Measure Ad Performance On New OTT Platforms?

comScore's Caroline Horner discusses the latest comprehensive methods for recording and assessing ad performance metrics while contending with the ever-expanding matrix of OTT platforms and services.

Video: How Do You Get Millennials to Adopt OTT Services?

Jason Thibeault of the Streaming Video Alliance discusses survey results on millennial viewing habits for online and OTT video.

Video: Why Are Content Owners and Broadcasters Migrating to OTT?

Ooyala analyst Jim O'Neill and Machinima SVP James Glasscock discuss why content owners and broadcasters are recognizing the need to get on board with OTT in the face of cord-cutting.

Video: What's Next for IP-Delivered Video?

Panelists from NBC, Flix, and comScore discuss which OTT business models will and won't work going forward, and whether or not you need scale to be successful.

Video: Are OTT Providers Fishing in the Wrong Pond?

Google's Serge Kassardjian, Whistle Sports' Brian Selander, and Recurly's Dan Burkhart discuss the challenges of differentiation in the OTT services market.