Last year, it was a bit of a “bogey man”… OTT (over-the-top….do we really even need to keep spelling that out?!) content threatening to flood operator networks with not an extra penny in sight for those operators to reap in exchange for expanding network costs. The threat seemed to come from a couple of 800-pound gorillas that could hardly be called ‘new entrants’, but also did not have 25+ years in in the entertainment distribution business. Then things took an interesting turn with some of the more established players (e.g. HBO, CBS) announcing OTT services of their own.
The next thing we all knew, everyone was getting into the game. And with announcements being made almost daily, OTT indeed was the ‘new normal’ as we wrote just a month or so ago. But, things were still a bit murky: distribution was not clear; co-opetition seemed inevitable; and “follow the money” didn’t help all that much as it was not obvious what consumers were actually going to pay…and for what (see our previous blog post, about bundling/not).
A few months later and some of the murkiness is lifting with early signs of success being seen, with an article just yesterday highlighting HBO Now as a particularly good example.
For the operators who a year ago looked to being sidelined by OTT, there are also encouraging signs. A recent article on VideoInk notes that despite dropping subscriber numbers (due to some sort of blade-action subscribers are taking on their service: cutting, shaving, clipping, whatever), NA cable operators are actually seeing ARPU increases. The article suggests that OTT services may be part of the reason for that ARPU growth. Maybe there is hope yet for ‘traditional’ players?
Of course, it’s still early to know what the “winning” OTT business model is (or more likely, ‘models are’), but the point is that an awful lot has happened in the last 12 months; perhaps more change than in any other 12 month period of cable and broadcast. OTT has indeed disrupted the industry – forcing change – and change at the pace demanded in today’s “digital world”.
Regardless the winning model(s), OTT still relies on traditional network operators to get it to consumers’ “eyeballs”. Given the sheer volume with which operators need to grapple, it is clear that new delivery approaches are needed. Approaches such as those PeerApp offers with our Local Content Delivery solutions.