-->
Join us for Streaming Media Connect 2022, February 14th-18th. Reserve Your Free Seat Now!

Research Report Charts the Rise and Challenges of OTT Video

Article Featured Image

A little more than a fifth, 22 percent, of industry executives would prefer to maintain multiple DRM technologies managed through a single content security platform. Slightly fewer executives, 19 percent, would prefer to manage OTT video using just one DRM technology, while 12 percent choose to manage multiple DRM technologies in separate silos.

Among OTT security technologies, HTTP Live Streaming (HLS) is the top choice for industry executives. This technology was initially developed by Apple for use in Quicktime and iOS. HLS with enhanced rights management is most important for 38 percent of respondents, and HLS with basic encryption is top for 34 percent. Adobe’s Flash Access is the choice for 25 percent and Microsoft’s PlayReady is most important for 23 percent of respondents.

Tablets Lead Drive to Serve Multiple Devices

When it comes to platforms and security technologies, the chosen platform had better work with tablets. At 80 percent, an overwhelming majority of media executives say tablets -- a 3-year-old technology -- are the device of choice for accessing OTT content. Desktops and smartphones follow closely behind, with 72 percent and 71 percent of respondents, respectively, saying that these are also important targets for OTT video delivery.

What becomes clear is that supporting multiple devices is a key implementation challenge for OTT, something that 80 percent of respondents agree with. Yet, due to fragmentation, there is still the need to deliver to streaming set-top boxes, such as Roku and Apple TV, as well as game consoles, such as the Microsoft Xbox and Nintendo Wii. A majority of executives, 56 percent, place a priority on set-top boxes, while 41 percent prioritize game consoles.

The need to serve such a diversity of devices and viewing platforms forces the issue of standards and protocols for video delivery. By far HTML5 is the technology respondents believe will have the most significant impact in the next three to five years. One respondent says, “I hope the future will bring something more unified, like HTML5, where you hopefully will not need plug-ins, such as Flash, QuickTime, or Silverlight.”

Another respondent speaks to the problem of serving the same content to smartphones and televisions: “A common algorithm must be devised that can be scaled dynamically. The same basic file need to be used on a small screen phone as is used in a theater based on resolution and color depth.”

OTT Video Needs Bandwidth

To serve this content the provider and consumer alike need a lot of one thing: bandwidth. So it’s not surprising that 59 percent of media executives say bandwidth limitations are the leading technical obstacle to OTT adoption. Consumers want a smooth viewing experience without pauses or glitches. Thus, 55 percent of respondents see quality-of-service and the viewing experience as a problem to be addressed.

Using that bandwidth, video-on-demand (VoD) is considered the most important OTT service among pay TV operators, technology vendors, and content providers alike, with 70 percent or more of respondents in each sector agreeing. Live linear content is considered currently important by 48 percent of respondents, but 63 percent think it will be important in 3 to 5 years. Bandwidth cost for live streaming is a concern. As one respondent observes, “Since live transmissions use a huge amount of bandwidth and are concentrated in a certain period of time, it’s very expensive to monetize live video.”

Engaging viewers socially and on second screens is also important to a majority of media executives: 58 percent say OTT video should have social media functionality. On companion screens, content search is ranked as important by 40 percent of respondents. Social media integration is second, with 20 percent of executives calling it important.

Television Is Taking Over the Internet

Online TV is on the upswing and OTT video is a growing component of this shift. The maturation of this sector means that consumers appear increasingly willing to pay for OTT services. At the same time, pay TV operators, content providers, and technology companies face challenges in security, obtaining multiple screen rights, and unifying delivery to a wide range of devices.

This report shows that OTT is both a threat and an opportunity. Industry executives don’t believe OTT video will replace subscription-based pay TV in the near future, although it will become a significant adjunct service and an outlet for targeted programming.

That tablets -- a device category that barely existed three years ago -- are now the most important device for the delivery of OTT video demonstrates how quickly the landscape shifts.

The continuing challenge will be tracking and responding to consumers’ changing device preferences, while still providing a high-quality experience on multiple screens.

Download the full research report -- OTT Video: Coming to a Paid Channel Near You -- for free.

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

Infographic: Is Over-the-Top Video a Major Game Changer for Pay TV?

Get a visual summary of the key findings from Verimatrix and StreamingMedia.com's research report surveying over 750 industry executives.

Verimatrix Study: OTT Adoption Hurt by Broadband Limitations

A survey of media industry executives finds that content security is a major issue for OTT delivery, and that quality of service is an obstacle.

OTT Revenue Grew by 60 Percent in 2012, Says ABI Research

The worldwide OTT economy is over $8 billion, but it will expand greatly in the next few years.

The State of OTT Content Delivery 2013

Over-the-top delivery is shifting to more than just in-home content. Learn how the cloud, network DVRs, DASH, and DRM are combining to make TV Everywhere truly everywhere.