PayTV operators cash in on over the top demand

As the year draws to a close the activity around over the top (OTT) video has intensified. Almost all Europes broadcasters have gone OTT with live and catch-up services. The arrival of mainstream Subscription VOD (SVOD) offers, from ITV in the UK, Teleboy Serien in Switzerland or HBO Go in the Nordics, promise to further accelerate an online video market which has witnessed the emergence of fully bundled pay TV offers embracing the set top box, live TV packages and streaming VOD services.

With global spending on OTT video set to rise to 3.53bn by 2018 (Strategy Analytics) it is payTV operators that may reap most benefit from the consumer demand over that of pure-play players like Netflix - by extending their reach into online subscription services.

Analysts Analysys Mason agree, arguing that the real impact of OTT will be felt on secondary TV sets and that traditional operators could broaden their reach with their own OTT services to these sets.

We are entering a new phase in the evolution of TV distribution over the public internet, states Strategy Analytics. Pay-TV service providers are recognizing the defensive imperative in ensuring they have a major say in the development of online TV. Standalone online subscription TV addresses the holdouts who will not be swayed by traditional premium TV offerings by promising high quality content including, crucially, live sport, shorter commitment periods, a lower cost of entry and much simpler installation and hardware requirements than traditional, full fat' pay-TV services.

The key 2013 deployment in this regard was by BSkyB, which in July launched its Now TV Box at an impulse buy price of EUR11.71 offering pay-per-day access to its premium sports channel line-up, as well as subscription-based access to its premium movie content.

Earlier in the year it launched Sky Go Extra enabling Sky customers to download content to mobile phones and tablets. Then, in December it made available movie rental service Sky Store to non-Sky subscribers to stream movies such as Despicable Me 2 ahead of Netflix or Lovefilm in the UK and Ireland.

Rival Virgin Media replied by launching its TV Anywhere on-demand and live streaming television service already free to TiVo customers - on Android mobile devices. It had already made its most significant play of the year under new owners Liberty Media by boldly making Netflix available over TiVo boxes. The deployment marking the first time that an OTT offering has been accessible by subscribers through a pay-TV platform.

Netflix subsequently struck similar deals with Waoo! in Denmark and Com Hem in Sweden, also on TiVo, raising the possibility that Netflix could be going after one cable operator in every market.

TiVos CEO Tom Rogers said of the Virgin-Netflix tie-up, that the merger of linear television and streaming over-the-top TV is where the future of television is, and Netflix has clearly risen to the level of a must-have on the over-the-top side.

Another must have for most TV operators in 2013 and into 2014 is the network or Cloud PVR. Several European operators including Spains Telecable, Belgians Telenet, The Netherlands Ziggo and Switzerlands Swisscom have already rolled out services which replace the traditional STB or DVR and are claimed to give viewers far greater freedom in how they watch TV, as well as enable pay TV providers to develop innovative services at lower costs.

TiVO and Quickplay Media demonstrated new products at IBC2013, while Alcatel-Lucent picked up an Emmy for its pioneering work in implementation and deployment of network DVR [alongside Time Warner Cable and Cablevision Systems Corp].

The potential for using Cloud and IP networking to replace the traditional STB or DVR is claimed to give viewers far greater freedom in how they watch TV, as well as enable pay TV providers to develop innovative services at lower costs.

The biggest challenge for networked PVR services is that universal, perpetual rights for TV content in the cloud do not exist right now. Because of this, its likely 2014 will see ongoing growth and adoption of catch-up TV services, offering users multiple platform, post-broadcast access to content, but within acceptable licensing constraints for the content owner.

LINK:	http://www.ibc.org/page.cfm/action=library/libID=2/libEntryID=223/list...
	See more stories from ibc

Most recent headlines