The content provision business has turned into a mad scramble with traditional
broadcasters, pay-TV operators, Internet companies, mobile phone networks
and telcos all vying to reach fragmenting audiences across multiple platforms.
Over-the-Top (OTT) TV, where consumers view content that is available on the
Internet and delivered via a broadband connection, was a term frequently
mentioned during a session at the recent International Broadcast Convention
(IBC) in Amsterdam on how to target consumers.
Said CEO of Vimond Video Solutions, UK, Helge Hoibraaten: “I believe that the
OTT TV space will be the most significant form of TV distribution in the future.
Broadband capacity is growing and the cost of distribution falling. OTT TV
penetration is driven by the consumer’s desire to be independent of TV
schedules. My six-year-old old son is growing up in an era when you can have
any content any time.
“At the moment many services in the OTT TV space are merely replacements for
video recorders, like catch-up TV services for example, and are far from creating
exciting experiences for the user. In addition there is a lack of suitable content
and no clear business model which defines the new value chain and who is in it.
“As to who will take the lead in the OTT TV space – broadcasters already have
viewers’ attention which is a big advantage. Broadcasters are also in a position
to define what is considered to be good content and that’s a healthy space to
be in. Furthermore, they know how to engage a mass audience. I describe
broadcasters as the “sail-powered’ industry at the moment but other players are
coming up with diesel and steam. You want the audience to move to you and
not your competitors. All the big changes in the broadcasting landscape of the
past 10 years have been technology driven.’
Anthony Rose of Zeebox, UK, described OTT TV as “taking last night’s TV and
sticking it on the Intenet’.
“The current perception is that broadcasters are reliable and Internet is a bit
dodgy because of buffering issues, but that is changing. I believe that exciting
new things should be introduced to OTT TV to make the viewer experience more
interactive, like dual screens. Also, you need to drive traffic to your website,’
commented Rose.
Survival of the biggest
Group digital officer of LOVEFiLM, UK, Lesley MacKenzie maintained that only the
big players — incumbents or new players — will win in the new broadcasting
landscape.
“I think all broadcasters should get into OTT TV and they need to do it quickly.
LOVEFiLM is not just a subscription service but transactional and rental as well.
We’re in the UK and Germany at the moment on multiple devices and are
aggressively expanding with more content and platforms.’
MacKenzie stressed that the power of the brand should not be underestimated.
“Marketing is very important and you need strong marketing roots. Because big
brands like Amazon already reach their audiences they can market their new
services directly.
“Content remains king and is the biggest barrier to entry to any new player. It’s
expensive to buy content as there are so many players, plus content requires
distribution windows. Content providers need a compelling offering on several
platforms that’s easy to access.’
Statistics
Paul Tarplee of TwoFour Digital, UK quoted some interesting statistics collated
by UK regulator OFCOM. Thirty-five percent of adults in the UK use Internet to
watch catch-up TV; 74% of homes have wired broadband; and 93% of homes
are attached to a set top box (STB).
Tarplee continued: “I have five kids ranging from seven to 17 and a whole range
of devices and games consoles in the house. Kids switch from one device to
another with little loyalty. My kids have TV in their rooms yet they plug in their
iPhones to watch content.
“Connected TV, where Internet and Web 2.0 features are integrated into TV
sets, is in its infancy. But it raises the question – when we are in our living
rooms, are we going to switch on our connected TV or are we just going to use
a set top box (STB)? Is the TV still going to be the primary source of content or
will it be the STB? Broadcasters need to find ways to live with the chaos caused
by new media platforms.’
On the mobile front
Steve McCaffrey of Motorola Mobility stressed that consumers are very
discerning. “You have to take note of their desires and demands. Content has to
be contextually relevant – it has to be what consumers want to watch. Mobile
phone operators must ask what is the personalised device on which these
consumers watch content? When and where is that content watched?
“I’m a firm believer in OTT TV and I think mobile operators should embrace it. The
big problem for everyone is how to give their content a common look and feel
once it is aggregated. There needs to be some gateway into the home and not
necessarily a STB. If you look at the multiscreen environment, moving content
across more screens creates problems.’
Motorola was recently acquired by Google for $12.5bn, a subject on which
McCaffrey refused to comment.
The medium is the message*
Hoibraaten noted that when he worked at TV2 in Norway, he and his team
struggled for nine years to raise the profit from the broadcaster’s OTT service to
5%. “Now, in the past two years, it has grown from 5% to 10%. The way we
distribute the message is the message. You have to create a thrilling user
experience.’
Rose concluded the session by saying that the Internet survives by chaos and
the survival of the fittest. “No-one has the answer – you just have to keep
trying new things.’
*A phrase coined by Marshall McLuhan in his book Understanding Media: The
Extensions of Man, published in 1964.
