OTT is increasingly being deployed in Europe for subscription services rather than just as part of TV Everywhere strategies for cable or satellite operators.
As well as providing a platform for new entrants, OTT is giving new life to IPTV operators that had previously not made much headway, or had been unable to afford the network upgrade required, involving building out of fiber closer to the premise.
In Ireland, Magnet Networks pioneered IPTV around six years ago, deciding then that only FTTH, bringing fiber all the way to the home, would enable broadcast-quality HD services. Accordingly, it struck up partnerships with building developers to install fiber in new homes. This worked during the then-prevailing housing boom in Ireland, but the wheels came off in the credit crunch that hit the country particularly hard. This ended the strategy of accumulating FTTH customers in new housing estates. And, as the quality attainable, not just over managed IPTV networks but also over the Internet, continually improved, Magnet decided to put its faith in OTT as the only really affordable way to extent its footprint across the country. It then launched an OTT service in 2011 called AerTV, initially as a separate service complementing IPTV, but with the view to replace it over time.
For Jazztel in Spain, OTT has already replaced IPTV. Like Magnet, Jazztel was an early entrant into IPTV, launching its service called Jazztelia in 2006, but had the misfortune to be pitched against a very strong incumbent, the national Telco Telefonica, that’s Imagenio IPTV service now has almost 800,000 subscribers. Jazztelia found it hard to progress against Telefonica’s much greater marketing might, and, after four years in 2010, had only 11,000 subscribers. This was not enough to break even, so the service was closed down. But, after over a year absent from the pay TV market, Jazztel is having another go, this time with OTT, with lower cost of deployment, and hoping to attract some of the subscribers Telefonica cannot yet reach with IPTV.
With about one million broadband subscribers as immediate potential customers, Jazztel hopes it can quickly surpass the low numbers achieved with its ill-fated IPTV offering.