Service providers switching focus from linear TV to OTT | Media Analysis | Business
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More evidence as to the extent of cord-cutting has arrived in the form of research showing that to compete better with the likes of Amazon and Netflix, US service providers are decreasing marketing on their cable, satellite and IPTV products.

directv nowAccording to ABI Research in its Service Provider OTT Services & OTT Set-Top Boxes report, significantly increasing competition in the over-the-top (OTT) space in mature pay-TV markets will drive global live linear OTT video services to be worth approximately $7 billion by 2021 - almost seven times that gained in 2016.

“These services meet the consumer demand for anytime, anywhere programming and mobile-centric viewing while targeting a larger national audience,” said Sam Rosen, managing director and vice president at ABI Research. “The services fit within carriers adopting mobile-first mind-sets as mobile subscriber bases and revenues exceed fixed line revenues, largely due to per-consumer as opposed to per-household connections. This helps win the battle for exclusive content rights but poses strong technical challenges.” As a key example, the company cited DirecTV Now, an AT&T national product with live linear TV.

Yet the despite its bullish forecasts, ABI cautioned that delivering these services comes with many technical challenges, beginning with developing content management systems, video transcoding and storage pipelines, application ecosystems, and piecing together adequate video distribution networks.

When mobile OTT services are considered, the report also noted quality of service assurance, network congestion management, content protection including analytics-based protection, such as modules which limit password sharing, and business analytics as key technical tasks.

The analyst regards such challenges as so significant that it has already led many operators to make significant investments in technology platforms, such as AT&T/DirecTV’s purchase of Quickplay Technologies to gain better control of its OTT launch. Another example given was Disney’s equity stake in BAMTech to have better strategic control over its syndication platform

“Despite the technical challenges, OTT services help pay-TV operators attract cord-cutters with a cheaper pay-TV alternative, as well as next-generation customers who never planned to subscribe to a traditional pay-TV service,” added ABI industry analyst Khin Sandi Lynn. “Live OTT services, particularly sports packages, continue to gain the most traction, as they allow customers to watch the same live programmes that they receive through pay-TV services at a fraction of the cost.”