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Who’s Afraid of OTT?

Dennis Mendyk
5/19/2014
50%
50%

OTT specialists such as Netflix pose the greatest competitive threat to traditional communications service providers, according to about half of the respondents to a new industry survey.

About half of the Light Reading community that responded to the ongoing 2014 BTE Preview poll during its initial 48 hours said OTT service providers such as WhatsApp and Netflix pose the biggest outside competitive threat to network operators -- an even bigger threat than the 800-ton fiber-wielding overbuilding gorilla known as Google.

Much less scary are actual on-the-ground (or over-the-airwave) competitors like other telcos, mobile service providers, or cable operators.

We're still in the early stage of data collection for the poll, so these numbers could change. You could register your two cents (or pence, or fraction of a bitcoin) by taking the survey here (two minutes is all you need):

2014 BTE Preview Survey

Everyone who takes the survey will get a report with full results following our Big Telecom Event in June. We'll also be sharing results with attendees at BTE.

So let us know -- are you really that scared of OTT? Does the thought of Reed Hastings cause you to break out in night sweats? Or is that monster under your bed something else?

— Dennis Mendyk, Managing Director, Heavy Reading


Check out the agenda for Light Reading's Big Telecom Event (BTE), which will take place on June 17 and 18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions devised and hosted by Heavy Reading's experienced industry analysts with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see Telecommunication Luminaries to Discuss the Hottest Industry Trends at Light Reading's Big Telecom Event in June.


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mendyk
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mendyk,
User Rank: Light Sabre
5/23/2014 | 8:37:41 AM
Re: Is it a surprise it isn't >50%?
Maybe there's a Light Reading story or three in this?
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/22/2014 | 7:55:42 PM
Re: Is it a surprise it isn't >50%?
Exactly, so. Why do service providers see OTT players as a threat? People have to sign up with a service provider in order to get Netflix. Netflix brings them business. 

It's like a real estate developer feeling threatened by a school and shopping opening nearby. 
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
5/20/2014 | 10:32:19 AM
Re: Indie Makers
Thanks, seven. Based on my experiences (ranging from startups to Fortune 500 media giants), marketing and distribution are among the most important and most overlooked parts of a successful business plan. I know too many creative types who've learned the lesson of DIY the hard way, and they'd like nothing better than to go back to the good old days when greedy middlemen made them a lot of money.
brookseven
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50%
brookseven,
User Rank: Light Sabre
5/20/2014 | 10:24:58 AM
Re: Indie Makers
Dennis,

I do a lot of small business consulting nowadays.  I find small businesses have (and here is a bunch of stereotyping) to be pretty primitive in understanding the issues of being a business in Sales/Marketing/Distribution.  I have a few clients who came out of creative businesses and they have essentially no clue about it at all.  

I think anyone who is a creative and wants to self-publish should read Michael Gerber's "E-Myth Revisited".  I think the best thing about it is that it tries to point out that being an author/director/video person is very different than running an independent studio (it uses a different example business, but it is the same point).

seven

 
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
5/20/2014 | 10:11:13 AM
Re: Indie Makers
As reprehensible as media conglomerates can be, they serve some useful purposes. The same goes for content aggregators like video service providers. Most people don't want to sift through thousands of possibilities for time-killing entertainment. The irony about self-publishing is the goal of hitting the jackpot through a more lucrative channel. As you say, sales, marketing, and distribution are the real drivers. 
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
5/20/2014 | 10:09:51 AM
Re: Indie Makers
Dennis,

I do think that OTT video makers will become important challenges for the carriers over time.

By that I mean Disney, Universal, Sony, etc.  Netflix as an aggregator is not a challenge.  But the actual studios have enough marketing power and money to require the telcos/cablecos/satcos to do things that cost the delivery service money.

I wonder if there some analogy that will come of this whole thing like the old movie theater problem from the 30s or 40s where eventually structural separation was enforced.

seven

 
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
5/20/2014 | 10:07:50 AM
Re: Indie Makers
Yes, but Star Wars was made in 1977.  (I know because I went to see it the first week it opened the day that my friends and I got out of class from junior year in high school.   We took the train to Manhattan and got in before the "mania" hit so we didn't even have to wait in line! )

But with Star Wars Lucas was able, as an entreprenuer, to establish a whole bunch of marketing channels for the peripherals like action figures.   His contract gave him the rights to all the paraphrenalia and made him a very rich man.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
5/20/2014 | 9:55:42 AM
Re: Indie Makers
Star Wars became a franchise because of conventional mass-market distribution.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
5/20/2014 | 9:53:48 AM
Re: Indie Makers
Dennis,

I think what will happen is similar what is already happening in self-publishing of books/e-books.

Lots of people will do it to no avail.  They will realise that marketing and sales are actual functions and that the "studios" actually perform a function here.  There will be some very popular folks that are able to self-publish and make more money.  Finally, there will be the vast majority that stick with a middle man.  The production value is interesting, but more important is the sales and marketing platform.

There used to be statistics that 80% of Youtube videos had 5 or less hits and a significant chunk had 0.

seven

 
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
5/20/2014 | 9:51:39 AM
Re: Indie Makers
Yes and Radiohead!

To me it's inevitable that the portals will be challenged by those who already have fans.

The biggest barrier is the payment mechanism.

Who wants to sign up for a thousand sites when you can one-click at Amazon, or just pull up Netflix on your Android tablet and Chromecast it to the LCD?

So you'd have to have a "cloud marketplace" where someone can mix and match web services like payment but still be an independent site.

 
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