Once ‘barbarians at the gate,’ OTT now an opportunity for pay-TV operators

By Jim O'Neill on Jul 21 2014 at 5:30 AM
A new study says OTT is more friend than foe for pay-tv operators

Over-the-top video services like Netflix, Hulu and a growing array of others have long been seen as a threat, or at least a bother, to pay-TV providers worried about the cannibalization of their revenue streams. It wasn’t very long ago that one of the most popular panels at any trade show generally was title, “OTT: Friend or Foe.”

But a new study posits that operators and OTT players now are “striking an unusual friendship” as consumers continue to adopt OTT in many forms.

Researcher Heavy Reading, in its “Cable & OTT: New Opportunities for Convergence” report said that, increasingly, cable MSOs and OTT providers are finding mutual ground to work together, pointing to Comcast's interconnection deal with Netflix as an example of how cable can become a distribution partner for OTT video streaming services, generating incremental revenue from the service.

Time Warner Cable, in it partnership with Roku, was one of the first major MSOs to provide customers with apps that allow cable TV access through that streaming set-top box. Now, the report said, more MSO are likely to do the same for Roku and other connected devices like Xbox, Apple TV, smart TVs and other devices.

Creating a new relation whip with OTT services is being facilitated, too, by the introduction of new cloud-based IPGs that offer a cable portal for OTT apps and social media. And, the report notes, TV Everywhere solutions also can support OTT apps.

Another source of incremental revenues for operators is the bounties that some OTT content and device providers are willing to pay for help in expanding their customer base.

The Heavy Reading report says the ongoing rollout of Ultra HD – specifically by Netflix as it converts more content to 4K – is one area that remains a potential flashpoint between the two technologies. The push to offer the bandwidth-hogging content could strain provider resources in the near term.

Nonetheless, both sides continue to parlay consumers demand for content into a relationship that has the potential for mutual success.

"As OTT video streaming services and devices began to attract consumers, they appeared like barbarians at the gate, ready to disrupt traditional media and topple the longstanding empires of cable and other television establishments," said analyst Craig Leddy. "Disruption indeed has occurred and will continue to occur, but the once-combative stances of cable and OTT players has taken a unique twist as both sides have come to realize that they can profit by utilizing each other's strengths."

Leddy said a number of challenges remain, including technical integration, territorial rights issues and monetization to provide a return on investment for all players.

“Cable's continued adoption of IP video technology and its renewed focus on improving TV Everywhere are providing the delivery infrastructure and management solutions that can support OTT video,” Leddy said.

Follow me on Twitter @JimONeillMedia

Posted in: 

READ THESE NEXT

Pay TV, SVOD, Millennials
Is cord cutting over? Far from it, and that’s creating new OTT opportunities
Mar 16 2017 1:15 PM

Has cord cutting finally run its course among U.S. operators who have, over the past five years, watched millions of subscribers walk away from traditional pay-TV delivery? Are Millennials – and their following generation, Gen Edge – ready to join Gen X and Baby Boomers in tying themselves to arcane and expensive contracts that deliver bloated tiers of content that they have little interest in watching, let alone paying for?

Nope.

For SVOD, churn much less of a threat than for pay TV
SVOD, Pay TV
For SVOD, churn much less of a threat than for pay TV
Feb 06 2017 8:15 AM

OTT video viewers may be just about as fickle as traditional TV viewers, with roughly 19% churning some of their SVOD services during the past 12 months, which is down from 20% a year ago, according to a new report.

Millennials turn back on Esquire Network; NBCUniversal, Hearst look to OTT
Millennials, Cord Cutting, Pay TV
Millennials turn back on Esquire Network; NBCUniversal, Hearst look to OTT
Jan 18 2017 4:15 PM

Could this be the start of the Great Cable Channel Recession? Maybe. Esquire Network, the joint venture between NBCUniversal and Hearst that began in 2013, today announced that it’s going to the promised land – OTT – later this year.

The channel was the victim of the continued erosion of the pay-TV audience, especially male Millennials, the Esquire Network’s primary audience.

Is live TV dying? No, but it’s not as healthy as it once was
Pay TV, Cord Cutting, SVOD
Is live TV dying? No, but it’s not as healthy as it once was
Jan 04 2017 3:15 PM

Viewing time of live TV continued to decline in Q3, albeit by only a minute in from a year ago, as viewers increasingly tune in to time-shifted TV and online video.

Nielsen said live TV viewing per day slipped to four hours and six minutes in the third quarter, a minute less than in Q3 2015, and a much smaller decrease than the six-minute drop between Q3 2014 and Q3 2015.

The extra minute went to DVR viewing, which increased to 29 minutes from 28 minutes.