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OTT video threatens to swamp broadband networks, but it can also create some big opportunities if operators are willing to take some risks
June 20, 2012
Over-the-top (OTT) video is a two-headed beast for the average pay-TV provider that also operates as a broadband ISP.
On one hand, OTT video threatens to swamp broadband networks unless it can be properly managed. On the other, OTT represents the potential for new profits and differentiated video offerings, if operators are willing to innovate and take some risks.
Cable and telecom network operators will only succeed if they are ready to tackle both aspects of this consumer viewing trend, say Heavy Reading Senior Analysts Alan Breznick and Aditya Kishore, the co-chairs for Thursday's Managing & Monetizing OTT Video event in Boston.
Already, the pay-TV business is beginning to suffer from cord-cutting, but cord-shaving likely presents the bigger problem, says Kishore. His research shows that about one-fifth of consumers say they're more likely to cancel premium packages than their basic pay-TV service, because of the availability of content elsewhere.
OTT is affecting content providers as well, as they are developing online video strategies intended to complement -- but hopefully not cannibalize -- the content they deliver in the more traditional manner. Alexis Fife Rapo, VP for broadband and interactive media for WGBH, Boston's PBS station, will offer one perspective on developing that segment of the content business.
And certainly the advertising segment of the video industry is being transformed by the rise of Internet video and multiple screens on which to view it. That's a topic that's getting its own separate breakfast session at the event, headlined by ad industry veteran Tim Hanlon, founder and CEO of The Vertere Group. Hanlon will later be joined by The Nielsen Co. SVP Scott Brown, Dish Network LLC (Nasdaq: DISH) SVP Warren Schlichting and Alki David, CEO of FilmOn Content Systems Plc , a global content delivery network (CDN) for IP networks, in examining the overall impact of OTT on the video entertainment market.
Service providers are not just sitting back, wringing their hands about lost video profits or network congestion issues, however. Breznick's research shows most major operators are already heavily engaged in TV Everywhere strategies that involve streaming video online as well as to the TV set.
Much of the event will be devoted to hearing about those strategies and success stories from the carrier community itself. Ian Blaine, CEO of thePlatform Inc. and SVP of Converged Products for Comcast Corp. (Nasdaq: CMCSA, CMCSK), will shed light on how his company is viewing growth opportunities -- and profit possibilities -- in the Internet video sector.
Maitreyi Krishnaswamy, director of interactive video services for Verizon Communications Inc. (NYSE: VZ)'s FiOS TV, is also on hand to explain Verizon's strategy for incorporating Internet-based video and applications into its service offerings. And Dale Merten, COO of Toledo Telephone, will offer an update how his company's pioneering efforts to replace IPTV with an OTT offering are faring with customers.
Business challenges often dominate the headlines, but delivering OTT video at broadcast quality to a growing range of devices over unmanaged networks poses technical hurdles as well, and this week's event will explore those in three separate panels by addressing caching, video preparation and the challenge of delivering video to multiple screens.
— Carol Wilson, Chief Editor, Events, Light Reading
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