Television services delivered over the top (OTT) via broadband networks have really started to take off, presenting traditional pay-TV service providers with both a threat from new entrants and an opportunity to launch multiscreen services by embracing OTT themselves and generating customer loyalty and additional revenues.
OTT is certainly gathering momentum as three-quarters of broadband users now watch online video on an ever more diverse range of client devices including their TV sets. Tablet and smartphone owners also make extensive use of their devices while watching television, creating a new media consumption paradigm when accessing second screen OTT services. Market-strategy firm The Diffusion Group (TDG) even goes as far as forecasting that by the end of the decade, consumers will be watching more broadband-delivered OTT television than traditional broadcast television.
Whether things will really evolve that fast is frankly yet to be seen but in any event we believe that established service providers have many factors in their favour to make the most of the OTT opportunity. Solutions like NAGRA MediaLive are available today to make multiscreen a reality for service providers worldwide.
Challenge to service providers The fact that consumers can increasingly use their PCs, smart TVs or games consoles to get films, TV series and sports events from third-party providers poses an evident challenge to the pay-TV business model. Similarly, new second screen applications, supported by the tablet and smartphone living room revolution, are also making TV content accessible from different sources. So where does this leave the traditional pay-TV operator?
The answer is that service providers must embrace OTT themselves and use it as a weapon to increase the value of their services. When they do so, they have a clear advantages over emerging competition. First, they can exploit their existing commercial relationships to sell new OTT services to their subscribers. Second, because they operate their own broadband networks or have secured partnerships with ISPs, they have more control over the user experience across devices and can ensure better video quality while controlling delivery costs. Broadcast service providers have a specific advantage in that a relatively low investment threshold will allow them to significantly enrich their existing DTH or DTT bouquets which are inherently efficient for high viewership channels, with the implied flexibility and multi-device reach of OTT.
Content and pricing are key factors too. Established pay-TV service providers can build on their existing relationships with studios, broadcast channels and other content providers to acquire additional rights for OTT delivery. Broadband operators can also gain an advantage in the marketplace by pricing OTT television services very competitively, even using them primarily to add value to their broadcast service subscription packages, leading to increased customer satisfaction and reduced churn.
The need for robust content protection and a consistent user experience But delivering OTT TV to a broad range of devices set-top boxes, connected TV sets, PCs, tablets, smartphones and games consoles also implies a need for robust content protection and a consistent user experience across all these different devices.
On the security front, set-top boxes, the traditional client devices of pay-TV operators, offer the highest level of content protection for OTT TV delivery. They rely on DRM technology with hardware security built into the chipset. This combination offers the most secure way to deliver television via broadband. However, in today's multi-device world, consumers expect to use their retail market devices to consume pay-TV content. These devices don't yet offer hardware-based security and need to rely on renewable software-based security instead. Connected TVs and Blu-ray disc players have varying degrees of openness and an increasing number of models are able to include some hardware-based security in their chipsets.
To address all of these use cases and deploy OTT services to multiple devices, service providers need a versatile and robust DRM solution. NAGRA MediaAccess PRM (Persistent Rights Management) addresses all of these scenarios by taking advantage of built-in hardware-based security, through the NAGRA On-Chip Security (NOCS) program or by running in a software-only environment. What's more, NAGRA MediaAccess PRM is Hollywood-approved by studios and premium TV channels. As the entertainment industry is raising the bar in terms of content protection, service providers need to make sure upfront that their best content will be accessible by their subscribers across all the supported devices. For devices where MediaAccess PRM is not yet available, the NAGRA MediaLive Service Platform provides multi-DRM capabilities that abstract the complexity of multi-DRM management and extend service reach to any device type.
With new devices and new forms of content delivery such as the second screen experience coming on board, the ability to provide a consistent user experience across all devices is another key differentiator for service providers. To achieve this, the industry has converged on HTML5 and JavaScript a move which facilitates the creation of consistent and seamless cross device user experiences. Services and applications can be more easily ported from one device OS to another, extending device reach without increasing the application development, testing and maintenance costs. NAGRA has adopted these standards in its MediaLive Client Framework, designed for portable application authoring and customization of the user experience. The framework is implemented by NAGRA's newest media convergence platform for set-top boxes, OpenTV 5, as well as by NAGRA Media Player clients on PC
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Television services delivered over the top (OTT) via broadband networks have really started to take off, presenting traditional pay-TV service providers with both a threat from new entrants and an opportunity to launch multiscreen services by embracing OTT themselves and generating customer loyalty and additional revenues.
