Cisco : Is OTT Here to Stay?

Cisco Blog >SP360: Service Provider

Part 2: What does it take to win in an OTT world?

In the first blog of this trilogy, I wrote that pay TV providers do not seem to perceive OTT video as a threat to their business.

Well one thing's for sure; there is plenty that we can learn from OTT video providers.

They certainly brought new standards to the video industry. And satisfaction surveys are clearly showing that their subscribers are happy. Service providers would do well to learn from these standards and implement them today.

So what is the secret sauce of the OTT video provider's success?

Three words: Aggregation, Segmentation and Simplification (no acronym needed this time).

Aggregation is about making it effortless for the subscriber to discover and enjoy relevant content. In fact, the content should find the subscriber and not vice-versa. And it should be available in formats optimized for all screens so that users can enjoy the best possible viewing experience on any device.

Segmentation is about mining the big data to better understand your subscribers so you can sell services and personalize the viewing experience for different user segments.

Simplification is about making it easy to opt in or out of a service, so that users can pay for what they like and access any type of content, at any time, on any network.

There's no doubt that OTT video has made its mark. But is it here to stay?

For me, the answer is a resounding YES. In fact it will only grow… big time.

As I mentioned in my last blog, video does indeed take up a huge part of IP traffic today. But compared to the overall video industry, video-over-IP represents only a fraction of the total video minutes delivered across the world. So there is plenty of room to grow.

It's already clear to every video professional that IP brings huge advantages for video delivery in that it extends reach and enables better personalization.

And so, in the long term, it seems that OTT will definitely play a dominant role in the pay video industry.

That said, the IP network is still not ready to support full video-over-IP. Take linear video for example. There has still not been a linear video event broadcast over IP to an audience of more than 1.5 million people (not exactly enough for the Super Bowl …). That's true when we discuss OTT on the unmanaged network (aka. the Internet), but it's also true for IP managed networks used by service providers.
It was the same story in the early days of Voice-over-IP (VoIP). But look at how ubiquitous that has become.

Similarly, Video-over-IP will ultimately become superior to video-over-broadcast. It presents a huge opportunity for service providers that can cope with this change, offering immediate competitive advantages while preparing their operation for the new video era.

Which leads to the inevitable question…

What can service providers do today in order to prepare for, and lead in, an OTT world (or should we say IP world)?

Stay tuned for the final post in this blog trilogy, and if you haven't yet, check out this new eBook: Transform your video services with a cloud platform

Resource:

Part 1 of the three-part blog series: Is OTT Friend or Foe?