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Snapshot of business opportunities and technology challenges that TV operators face with OTT delivery.
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Over The Top Delivery
1. Business opportunities
2. Technology challengesCzech Radiocommunication innovation day
1. Business opportunities
We all feel we could take Hasting’s chair, but do we have any simple OTT advice for incumbent TV operators?
So what is an OTT service?
• Over The Top of what?
– Providing a service over some else’s network
– Owning the client relation (billing)
• Some archetypal on-demand OTT TV services
• Live TV using OTT delivery
Recent UPC launch in Czech Republic
Six viewer options to watch OTT TV
1. From my provider, as part of my subscription from
incumbent,
2. From a pure OTT service,
3. Workarounds, using semi-legal setups,
4. Piracy,
5. On a connected CE device, from any service,
6. Using Catch-up services from TV channel, across all
platforms.
Strategy is easy for Pure Players, hardest for Telcos
Objective Telco Pay TV Pure Difficulty
Innovation leadership ✔✔✔ ✔✔ medium
Cross/Up-selling ✔ ✔✔ medium
Extend footprint ✔ ✔ ✔✔ easy
Stickiness – lower churn ✔✔✔ ✔✔ moderate
Acquire new Subs ✔ ✔ ✔✔✔ hard
Grow ARPU ✔✔ ✔ (✔) very hard
Lower Capex ✔✔✔ ✔✔ moderate
Lower Opex ✔✔✔ ✔✔ ✔ it depends
Lower customer acquisition cost ✔✔ ✔✔✔ easy
19 16 6
What are reasonable Objectives?Some 2013 Metrics …
• Current Situation: Incumbent Pay TV operator…
– own their developed market
– get >90% of revenue from DVB
– spend 80% of new development on IP
• 2 European pay TV operators both close to 10M DVB subs have well under 0,5M OTT subs
• Spectacular OTT flops so far from lack of
– Content, convenience, reliability, marketing plan
– Rarely technology
Lessons already learnt
• Things that haven’t worked (so far)
– Social TV apps, nobody can rival twitter/Facebook
– Stand-alone OTT to fully replace pay TV
• Things that have worked
– Convenience, simplicity
– Catch-up TV can be THE killer-app
• Other lessons
– TVoD works best in mature markets (e.g. FR, US), subs need to be educated about the service for several years
– SVoD requires scale in content and subscribers
Unanswered Marketing Questions
• Will viewer trade DVB QoS for:
– lower price?
– greater choice of content?
– Mobility?
• Will TV become completely delinearized?
– Except maybe for sports?
• Opportunities:
– Locking customers in by speeding up service development
– What’s the role of the devices in the (connected) home?
– Be almost as compelling but offer more.
2. Technology Challenges
Why it’s hard
Two acronyms: ABR & CDN
User experience
Why live TV can still be hard to deliver over IP
• Delivering video content over the Internet used to be difficult
– RTSP the stateful protocol
– It is now easier to deliver Standard Definition (SD),
– but clients already expect High Definition (HD) TV,
– Ultra HD is just around the corner.
• Live TV can’t rely on buffering as on-demand TV does with Progressive Download (PDL).
Managing Satellite TV broadcast
Encoding&
scrambling
EPG Data
Provider
TV channel 1TV channel 1
TV channel 1
6 key components to watch
Satellite took 20 years to get this right
Headend 1 encoding & scrambling
Headend 2 encoding & scrambling
EPG Data
Provider
Distribution network
Distribution network
VODproviderVOD
provider
VODServer
ACS
Backbone IP
Service platform
Portal, EPG etc.
Homenetwork
Homenetwork
Gateway
Homenetwork
Gateway
TV channel 1TV channel 1
TV channel 1
Backbone multicast
ON
T/M
SAN
ON
T/M
SAN
VODServer
At least 14 key
components to get
right
Managing TV delivery over IPIPTV has to succeed much
faster
Gateway
FCCServer
Scalability
• Once the challenge of delivering live TV has been met, scaling up becomes manageable– There is rarely more than 10 main channels
– ABR and CDN technology are suited
• Delivering on demand content is much easier initially, but can be harder to grow.– Everyone is watching something different
– There is little opportunity for economies of scale
• Catch-up TV can be a killer app for marketers, but can also kill a network!
Adaptive Bit Rate (ABR) streaming
• Adapts to network and device capabilities
• HTTP based (Stateless, client control)
• Based on chunks (Easy to cache)
http://en.wikipedia.org/wiki/Adaptive_bitrate_streaming
Content Delivery Networks (CDN)
http://en.wikipedia.org/wiki/Content_delivery_network
CDN pushing to the edge
• A key enabler for OTT delivery is turning out to be edge processing.
• The extreme edge of the network is actually the device the client uses to watch from.
– Operators that own the device or the software that runs on it have opportunities
• Global vs. local CDNs
– The jury is still out
Quality and Continuity of experience
• Service continuity across multiple networks presents TV providers with a specific challenge,
– Heterogeneous networks (Het Nets)
– Competition can be just a click away
– End user empowerment
• An opportunity arises for those that operate their own network.
About CTO innovation Consulting
www.ctoic.net
CTOiC offers:
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consulting
• Disruptive
business
modelling
• Quality of
Experience
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Innovation
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