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Making OTT Pay

Video Appliances

OTT is here to stay, with more and more consumers expecting their favorite programs anywhere, any time, and on any mobile device. OTT is having a powerful influence on home viewing as well, as more homeowners “cut the cord” on their cable television services and access an ever-growing array of Internet-streamed movies and other video content. This is a huge wakeup call for traditional broadcasters.

OTT is having a powerful influence on home viewing as well, as more homeowners “cut the cord” on their cable television services and access an ever-growing array of Internet-streamed movies and other video content. This is a huge wakeup call for traditional broadcasters. In the near future, Internet advertising revenues will outpace TV advertising revenues – and since OTT services are typically offered at a very low cost, simply adding them to an existing pay TV package won’t do much to boost the bottom line. Although OTT might attract new subscribers, picture quality must match traditional broadcast television; in other words, consistently high HD pictures that rival any 1080p screen, on every platform and device. Content rights are another consideration, since rights for a piece of content to be played out on an OTT service might be different from the traditional television broadcast rights, or might vary according to region. So what’s the best path for broadcasters looking to monetize and profit from OTT? One approach is to adopt a separate advertising model tailored specifically to OTT audiences. Being unicast, OTT delivery offers a unique and key advantage for advertising: the possibility of delivering a dedicated ad to each subscriber, tailored to his/her profile like targeted Internet advertising. Ad insertion for live streams is somewhat more complex to manage, since the live content often comes with generic ads that need to be replaced on the fly with tailored messages. As OTT works in a connected mode, there are two possible ways of managing this advertisement replacement: either on the player itself, or in the delivery network.

Another critical element for profitable OTT is a technology solution that can enhance the viewer experience while also maximizing available bandwidth and controlling costs, with the ability to embrace new compression standards as they emerge. For multiplatform OTT playout, a video system that can provide encoding/transcoding in all major industry codecs and formats is a must. This includes MPEG transport streams, Adobe® Flash®, Apple® HTTP Live Streaming (HLS), Microsoft® Smooth Streaming (HSS), and MPEG-Dash. Advanced encoding and transcoding technologies will be a critical success factor as media enterprises begin to realize the promise of new compression codecs such as HEVC for next-generation OTT delivery. In combination with other emerging standards such as MPEG-DASH, eMBMS, and LTE, HEVC will deliver bandwidth savings that translate directly into reduced operating expenses, while smoothing the way for video delivery in today’s most advanced multiplatform services.

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