OTT Gathers Mainstream Steam

SAN FRANCISCO—As the industry has grappled to keep abreast of the next new thing when it comes to multiplatform services, technology has morphed into a solution that content creators can no longer afford to ignore—a seamless means of delivering content via broadband that offers a complementary marriage to the broadcast and cable delivery world.

At this year’s NAB Show, it was clear that the industry has begun to embrace over-the-top content in ways that are at turns meaningful, productive and in some cases profitable. But what lies ahead?

To be sure, OTT is one answer to a question long-asked by the professional video industry: how do we embrace the progressive technology at our fingertips without alienating an existing business model?

And perhaps most pressing: Is there a risk in delivering video to consumers without having control of the very content a network has worked so hard to create?

Before going any further, it’s important to distinguish the difference between two OTT services currently available. “Pureplay” OTT includes streaming services such as Hulu, Amazon Prime, Netflix, etc., and streamed on a dedicated box such as the Apple TV or Roku or gaming console. Another service, called “TV Everywhere” is available from a pay-TV provider, offering a downloadable app that provides verification to allow subscribers to view the pay-TV content on mobile devices. Either way, viewers are paying to view the content through their broadband provider.

The broadcast networks have been wading into the OTT/TV Everywhere market in recent years, but with an eye on ensuring control over who can access the content. Last month CBS expanded its presence in the market with the launch of the CBS app for iPhone and iPad, allowing viewers to watch its primetime programming eight days after broadcast, with late-night programming available within 24 hours of broadcast. CBS had previously offered such apps for second screen content. ABC, whose “ABC Player” app has been available for the past three years, recently marked a milestone with 10 million downloads. Fox recently reached an agreement with Comcast to make its programming available to Comcast subscribers via TV Everywhere. And NBC offers the NBC App that allows viewing of network content on mobile devices.

Unlike VOD or even IPTV, which gives content owners hands-on control over the distribution of content, OTT players such as Netflix, Hulu or others—show that the technology and the mindset may be ready for wider adoption.

And the ways that consumers are accessing this OTT content continues to grow, whether it’s via a dedicated box such as an Apple TV or Roku, laptop, gaming console, tablet or smartphone. The grim news that has smacked broadcasters in the face earlier this year—that sales of television sets actually dropped for the first time in history— can perhaps be offset by the realization that it’s not the content that’s being abandoned. Rather, those who make up the new “Zero TV” households of the future may be avid content consumers boosting sales of smartphones and tablets instead.

A report published by the research firm The Diffusion Group found strong viewer interest in having access to multiscreen live linear content, with 75 percent of pay TV subscribers saying they were highly likely to use multiscreen live services if they were offered them by their content provider. The survey also found that these services might generate new revenue from digital advertising but also bring content distributors significant additional subscriber revenues.

“Providing OTT services offers the potential for new revenue via a connected digital platform capable of delivering targeted advertising; rich, branded entertainment; and sponsorships,” said Jennifer Baisch, senior director of product and services marketing for iStreamPlanet, a Las Vegas-based company that provide streaming solutions to media companies. “One of the biggest challenges for content owners and distributors is how to scale the technology that’s needed to bring more content, including live broadcast channels, to multiple screens.”

Major networks have begun to jump on board the OTT train via TV Everywhere, touting the technology’s ability to reach consumers. The jump makes sense: by connecting the dots between its various content creation arms—like the ABC Television Group has done with ESPN and the Disney the Disney Channel—paying cable subscribers are able to stay loyal to a network by watching distributed programming on secondary devices.

At its simplest, consumers are able to view OTT content two ways: by downloading an app to a mobile device, or by watching online via a live stream or via VOD. One major hangup for the industry has been the issue of revenue, and how best to market and price programming that comes through a secondary device. Experts say that figuring out how to make revenue from OTT programming remains in flux—a smattering of solutions range from individually targeted advertising that pops up on a smartphone when a viewer is watching a show, as well as onscreen ads that rotate in and out while a viewer is watching a self-controlled secondary-angle camera on their tablet, for example. So when that tough-girl from “Sons of Anarchy” saunters on screen wearing new sunglasses, a targeted ad pops up on a viewer’s tablet, an opportunity for content creators to dream up all sorts of incremental revenue possibilities.

Discussions are ongoing with networks and their affiliates about how this OTT relationship can be mutually beneficial to both. The affiliate board of directors of the major networks met at the NAB Show earlier this month to discuss, among other things, the live streaming of local and network content under evolving OTT delivery methods.

Solutions like Syncbak are also finding footing. A television distribution platform that’s been adopted by a number of broadcasters for OTT delivery of live, in-market television to mobile devices, the Syncbak app supports the iPad and includes an interface that allows users to view streaming schedules and search for live content. CBS and Fox are two broadcasters experimenting with the technology, which has the benefit of further pairing local viewers with local content.

“Consumers are voting with their devices,” says Brian Brady, CEO of Northwest Broadcasting, whose stations in Spokane, Wash., helped test the Syncbak technology last year. Brady now serves on the board of Syncbak. “As broadcasters, we need to make sure our content is seen by our viewers, regardless of device. The Syncbak platform not only helps us [accomplish] OTT, but to lead the way.”

Added Jack Perry, CEO of Syncbak: “Our app and platform [enable] broadcasters to keep their brand in front of viewers wherever they are and for viewers to be able to access live broadcast TV on a device they already own and carry,” he said. “We’re going to make it easy for any station who wants to become an Internet broadcaster.”

Other OTT solutions like Skitter are being positioned as a solution for ISPs who want to deliver live TV to their customers. Viewers who own a streaming box like Roku can use the Skitter solution to provide live television to OTT-enabled devices, with video delivered via MPEG-4 ABR encoding that can control the number of streams delivered to an authorized subscriber.

Unfortunately local broadcast stations do not have the rights to rebroadcast over TV Everywhere/OTT services. As a result, local stations are somewhat falling behind their cable network competitors in providing programming for this service, according to Mark Fratrik, vice president and chief economist with BIA/Kelsey.

“While it may not be too big of an audience now, it certainly can be in the future,” he said, “and it is important for local television stations to be able to access all potential audiences.”

Susan Ashworth

Susan Ashworth is the former editor of TV Technology. In addition to her work covering the broadcast television industry, she has served as editor of two housing finance magazines and written about topics as varied as education, radio, chess, music and sports. Outside of her life as a writer, she recently served as president of a local nonprofit organization supporting girls in baseball.