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Era of OTT Aggregation Beginning, Says New StudyThe television industry is facing a period of unprecedented growth both in terms of content and distribution platforms. Despite this, we are entering a "phase of aggregation," according to a new report from Parrot Analytics created for MIP TV and MIPCOM. The study found that original programming is growing across all the platforms it tracks (broadcast, cable, premium cable and OTT). The number of scripted series grew 8.8% from 2014 to 2015 largely driven by OTT platforms, where original series increased from 27 to 44 titles. Parrot expects this figure to rise to 70 titles over the course of 2016, a rise of approximately 65%. Home Box Office Inc. (HBO) has also announced it will be offering 50% more original programming in 2016.
The number of platforms for distribution are also growing, with established companies like Netflix Inc. (Nasdaq: NFLX), Amazon, YouTube Inc. and others being joined by more niche providers such as Crunchyroll, an anime content specialist. Still, the company believes an era of aggregation is coming. The researcher lists two aggregation models, the Apple TV/Roku model where a device is used to aggregate multiple apps for multiple services; and the Hulu/Amazon model where one video streaming provider (Starz Entertainment LLC , Showtime Networks Inc. ) adds its app to a larger providers' platform (Hulu LLC , Amazon). While these apps are still independent today, "their availability on more popular platforms enables them to reach a much wider potential audience and allows users of the main platform to customize the types of shows they can watch without managing multiple services." Given that competition is forcing providers such as Watchever to close down, it does make sense that OTT providers would want to look for ways to aggregate content and facilitate user adoption. The pressure to create more content to attract and keep subscribers is intense -- and as Parrot's research points out, only going to increase. (See Does Watchever's Demise Highlight a Looming Challenge for OTT?) However, I believe there is another aggregation model for OTT providers, and that is with the pay-TV operator. We have seen Netflix, for example, partnering with a number of operators such as Comcast Corp. (Nasdaq: CMCSA, CMCSK) in the US and Virgin Media Inc. (Nasdaq: VMED) in the UK, to include its service in the pay-TV lineup. This partnership would be as advantageous, if not more, for niche OTT players. Pay-TV providers still have a larger footprint and viewership than most OTT providers in each region, so they could be important players in the new video ecosystem. (See Growth of Netflix Competitors Could be Positive for Pay-TV Providers and Comcast Confirms Netflix Coming to X1.) Parrot's research also found differences in the relative popularity of shows in various countries, suggesting that local curation would be important. Managing the global curation of content libraries with thousands of titles in hundreds of countries would require a significant investment not many OTT providers could afford. Having a local partner with content acquisition experience and its own libraries could be an important asset, while still allowing the OTT provider access to a global audience and the associated revenues. Especially for niche providers, such an arrangement could help them focus on what they do best, while still taking advantage of region specific sensibilities and content requirements. Despite Parrot's assessment, I believe the "phase of aggregation" they describe is still a couple of years further out. At the moment, I think OTT providers are riding a wave of optimism and growth, and being given a lot of rope by investors. But I also believe Watchever's demise is an example of things to come. Slowly, but surely, more OTT providers will struggle to make it entirely on their own. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
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Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
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