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Going over-the-top with OTT: The broadcasters' Catch 22

29/09/2022

Thomas Bostr m J rgensen, CEO, Appear, queries whether broadcasters should go all in on the next generation, or maintain focus on their declining pool of traditional TV viewers

By Contributor

Published: September 29, 2022

Thomas Bostr m J rgensen, CEO, Appear, queries whether broadcasters should go all in on the next generation, or maintain focus on their declining pool of traditional TV viewers

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Broadband has sparked a revolution across the entire content production and broadcasting value chain, enabling new ways to create, contribute and distribute content. With added flexibility, IP offers broadcasters and content producers the potential for massive cost savings. This is not, however, to say that IP as we know is a silver bullet that will solve all problems with traditional' content contribution and distribution. There are significant considerations to take into account on both a technical front, and with regards to meeting customer expectations. Leaning too far into IP-based offerings runs the risk of alienating a core customer base for many broadcasters, those legacy customers still using linear TV services, but by not developing next-generation OTT offerings there's a significant risk of being left behind the curve and missing the market's next shift. But what is the balance here? And why is customer expectation shifting?

Earlier this year we conducted a survey of players from across the broadcast industry to understand more about the technology areas and developments that would impact them in the year ahead. Of those that answered, 66 per cent believed that streaming services will slightly or rapidly grow, and traditional pay-TV services will decline-a lot or somewhat. For sport, 64 per cent think live streaming of sports and other events will be a similar or better experience to satellite or cable broadcasts of these events.

Two of the most impactful results of the broadband effect , how broadcasting has changed in response to the broadband revolution, are the ways that it has changed OTT and the resulting shift in consumer expectation. OTT, in particular, has rapidly moved from a niche content distribution method to one of the primary distribution methods that broadcasters use today, in order to be able to bring more content to more viewers.

When we think about traditional content distribution, we typically think about content distributed through linear channels in very controlled environments, with equipment designed for that purpose. Though restart and PVR mechanisms do exist for non-OTT services, they aren't capable of providing enhanced experiences that customers have come to expect. Broadband has, however, blown the doors open on this, with remote production teams now able to broadcast content from virtually anywhere that has a fibre connection, and in the future, anywhere with mobile signal, thanks to developments in 5G technology. However, our respondents feel the ability to use 5G for live transmissions of primary content is some way off, with the majority (55 per cent) of respondents saying that 5G networks will have low impact on contribution in the next 12 months.

That being said, OTT's growing popularity is a direct result of a shift in viewer demand to enjoy content on-demand. In days gone by, watching TV was very much a passive experience dictated by broadcasters, who aired content at set times, meaning viewers were very much limited in choice. But the likes of Netflix, Amazon Prime, Disney Plus and others have disrupted the status quo, and today, viewers have much more control in terms of the content they watch and when. There is an ever- growing demand for choice, and viewers want to decide what they watch and when they watch it, completely of their own volition.

Though this demand is very real, and predicted to grow in future years as OTT offerings are the default for many younger viewers, there is still a sizable chunk of broadcasters' customer bases that prefer traditional services. This creates a problem for broadcasters, do they go all in on the next generation, or do they maintain focus on their declining pool of traditional TV viewers? Well, almost paradoxically the answer is both and neither. The way that broadcasters can keep customers happy both today and in future is to negotiate a balance between these two priorities, the exact way this is done depends very much on the demographic of your audience. Some regions or countries may have particularly strong fibre networks, encouraging more of a forward shift, while others may have a particularly dedicated satellite audience which will require a much gentler approach.

In either situation, from a practical standpoint what broadcasters need is flexibility. While hybrid models that incorporate both IP and satellite, cable or terrestrial are likely to dominate for some time to come, in order to make the most of the technology available, flexibility will need to be built into the value chain. With this in place, broadcasters will be able to meet the changing demands of their customers with on-demand content and dynamic viewing experiences.

An important point to grasp for broadcasters is to not just give customers what they want but to understand why they want it. Sports, for example, are one domain where satellite is still the preferred consumption method for many audiences. One key factor for customers is latency, in a die-hard football town, it's no fun hearing your neighbour shout excitedly 30 seconds before you see the goal and spoil the anticipation. Customers also want to be able to view sports on all kinds of devices, in all kinds of network situations, at a quality of experience that is comparable to, or better than, what they are used to. It's in understanding these cases that broadcasters can id
LINK: https://www.tvbeurope.com/media-delivery/going-over-the-top-with-ott-t...
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