Broadcasters, OTT Players Clash at IBC

AMSTERDAM -- IBC 2015 -- Broadcasters gathered at this week's IBC show in Amsterdam are playing down the threat posed by over-the-top (OTT) players, insisting there will continue to be demand for linear and "first run" content in the years ahead. But they're clearly worried about the impact that OTT could have on their businesses.

During a keynote session Thursday morning, Dave Butorac, the CEO of Middle Eastern broadcaster OSN, acknowledged that broadcasters would need to embrace new technologies and cater to changing customer requirements but argued that OTT players in his part of the world would struggle to survive in the long run.

"It will be difficult to prosecute a business model that is standalone OTT -- you need a major business to bolt on to," he told attendees. "A standalone OTT in the face of piracy and an incumbent like us will have a difficult road ahead."

One of the biggest broadcasters in the Middle East, OSN operates across 24 countries in the region and is planning on launching an Ultra HD service next year.

Like traditional pay-TV providers in other parts of the world, OSN has also introduced OTT-like services of its own in response to moves by Internet companies. (See Verizon Kicks Off Go90 Private Beta and Dish Slings OTT Service – What It Means.)

Butorac's comments came just a day after technology giant Apple Inc. (Nasdaq: AAPL) launched a new TV service, including a set-top box with an app store, and amid growing concern about the impact that online players like Netflix Inc. (Nasdaq: NFLX) and Amazon.com Inc. (Nasdaq: AMZN) are having on traditional pay-TV business models. (See Apple Brings tvOS to Apple TV.)

"Everyone is worried about it but there is a lack of understanding about Netflix," said Butorac. "They offer a content library but not the first run and as a broadcaster we need to make sure we keep the first run and live action happening."

The British Broadcasting Corp. (BBC) , the UK's public-service broadcaster, also reckons there will continue to be an appetite for more traditional media platforms, such as the TV and radio, but has obviously been troubled by the entry of web companies into the news market in recent years.

Captured by the BBC, recent footage of Syrian refugees at the Munich train station received far more hits on social networking site Facebook than on the BBC's own pages, according to Fran Unsworth, the director of the BBC World Service.

"Do users think it comes from Facebook or the BBC?" said Unsworth. "That is a big challenge for us -- making sure that our brand cuts through."

Want to know more about the impact of web services on the pay-TV sector? Check out our dedicated OTT services content channel here on Light Reading.

An executive from search giant Google (Nasdaq: GOOG) was naturally keen to highlight the opportunity for collaboration between broadcasters and OTT players. But he also complained that cable operators in the US are still making it hard for customers to consume content on different devices.

Thomas Riedl, the head of global Android TV partnerships for Google, noted that OTT-style services such as HBO Now were seeing "huge success as a standalone service" and that consumers had shown a willingness to pay for access to specific shows, such as "Game of Thrones," provided the pricing was right. (See Verizon Snags Broad HBO Now Rights.)

"You need to build a compelling user experience and make it easy for customers to pay for content and not tie them into complicated contracts," he said.

Nevertheless, broadcasters seemed to be in broad agreement with Google that a "long tail" of content would grow and co-exist with mainstream programming.

Riedl noted that PewDiePie, a Swedish comedian, was one of the most popular queries carried out on YouTube last year, drawing attention to the expanding market for content generated by so called "YouTubers."

"What we're seeing is a fragmentation of the content landscape -- how, when and what to watch," he said.

That could be a particular concern for a pay-TV programmer such as Scripps Networks , whose programs focus heavily on the entertainment and leisure categories.

"Content will be more personalized for customer groups," acknowledged Phillip Luff, the managing director of the UK and EMEA businesses for Scripps. "For us it will be a challenge to get ahead of that and we will have to experiment."

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

brooks7 9/10/2015 | 12:48:35 PM
Re: Broadcasters in denial Mtich,

I think the counterpoint is "House of Cards" or "Orange is the New Black".  And this is where I think the whole thing falls apart. If you add in Youtube, there is a LOT more first run content on OTT.  I am not talking about Joe Bob's wedding video.  But things like Ted Talks, Extra Credits, Twitch TV and other professional productions.  Disaggregation of content helps OTT all the time.


Mitch Wagner 9/10/2015 | 12:01:56 PM
Re: Broadcasters in denial Carol, you beat me to it. However, I think the market for linear TV may be bigger than you cite. In addition to live sports and live news, there is a certain amount of "appointment TV" -- GAME OF THRONES, MAD MEN, WALKING DEAD, and so forth. 

But linear TV is just a piece of the market now; it's not the whole market anymore. 

As for Butorac's statement that piracy is an existential threat to OTT providers: Experience has shown that customers WILL pay for content if it's made available to them at a reasonable price. Why deal with the dark web, and its accompanying hassle and legal prosecution, when you can just plunk down $5 and watch what you want in the comfort of your living room?
cnwedit 9/10/2015 | 10:41:40 AM
Broadcasters in denial Sorry, but while the OTT trend may catch on in some parts of the world later than in others, anyone who's relying on "first run" capabilities for anything other than live sports or live news is fooling themselves. 

And as the story notes, even first-run content is being filtered through the social media. As one of my colleagues, Mitch Wagner, recently noted, the best way to follow Apple's news this week was through twitter. Pew Research says 60% of Facebook and Twitter users cite those platforms as their primary news sources. 

Just the way the world is going. 
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