Operators are increasingly seeing the value of delivering video content direct to consumers. Some industry leaders have already been providing video services for years, while others are looking to launch their first video-centric service. Even for the incumbents, increasing competition from large media providers is putting pressure on them and also making it hard in some cases for them to get content rights from those providers.
According to Analysys Mason, the role of operators and pay-TV providers in directly distributing content via OTT services will increase during the next 5 years. The analyst predicts operator OTT video users will double from 57 million in 2020 to 110 million worldwide in 2025. However, this will still only represent about 7.2% of the total OTT revenue worldwide. New entrants and incumbents alike will need to rethink their go-to-market strategy to make sure they are truly maximizing the potential of OTT video.
Of course, getting the right content strategy is key, but so is the platform strategy.
Here are four reasons why:
Operators have a unique position to play the role of entertainment hub, but to do so they need to consider the right strategy to achieve this. This naturally depends on the audience being targeted and content that might appeal to those. The approach might be through partnering with third party content providers to deliver their content through your OTT service or it could be through licensing that content. That choice will strongly influence your platform choice.
With increased competition driving prices down, cost is naturally a massive factor in any video service. Launching a video service on multiple platforms, including the home platform, could be of course a challenge but this is not where most of the impact is cost wise. The real cost impact is that of evolution. It is important to ensure that your platform strategy enables service agility, meaning you can quickly adapt your video service as requirements and demands change.
Operators should not build and evolve a video service on their own, they need to thrive on the innovation of tech providers and partners. Before selecting the platform, it is important to ensure that it will enable innovation and experimentation and that there are the right vendors in place to make that happen without the operator becoming locked-in.
Depending on where the customers are, the operator may need to work with a platform that enables delivery to a wide range of hardware, from sticks to fully fledged set-top-boxes. It is important to know that your platform strategy enables that.
There are four major Platform OS which should be part of anyone’s evaluation when considering the next generation of their video service: Android TV, Android AOSP, Comcast RDK and Apple TV. Each of those platforms have the technical credibility to ensure a solid foundation of the home platform strategy which is the key pillar of the operator video strategy, but they are definitely contributing to the four metrics in different ways.
The Accedo Pay TV solution combines an advisory offering and the capacity to deliver on all these stacks on top of all other OTT platforms with an agile methodology. The importance is to make a KPI based decision on the platform strategy - there is not one size fits all.
For a deep dive into the major platforms for OTT operators, keep an eye out for our existing and upcoming parts of this OTT platform strategy series:
For a live discussion on OTT strategy and pay TV, you can sign up and watch our webinar: Choosing the right OTT strategy for your pay-TV service.
Together with our parent company Accedo and guests Roku and WatchTV we discuss OTT strategy for pay TV services including platforms, content, monetization, devices and more. Recording available now!