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HomeArticlesNew MediaOver-the-TOP (OTT) Services Future of Cable TV Industry
Saturday, 08 October 2016 12:00

Over-the-TOP (OTT) Services Future of Cable TV Industry

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Broadcasting system where the content is provided to the user without the use of Channel operators and Pay TV services is called Over-the-top content or OTT. In this, internet is used to show content on smartphones, and internet compatible screens. OTT refers to content from a third party which is delivered to the user using ISP. The paid broadcasters don’t use the OTT. 

A media content which is available on demand through the internet space and is accessible from any digital space which involves interactions is called as New Media and uses OTT. Examples of new media are online newspapers, blogs, wikis, video games and social media. As new media is subject to being manipulated, networkable, dense, compressible, and interactive, OTT is the best platform since it does not let the rules of conventional media to work on it. Old media like Television, Radio and Print is subject to rules of regulatory authorities as they are paid well by the broadcasters.

Consumers can access OTT content through Internet-connected devices such as desktop and laptop computers, gaming consoles (such as the PlayStation 4, Wii U, and Xbox One), set-top boxes (such as the Roku), smartphones (including Android phones, iPhones, and Windows phones), smart TVs (such as Google TV and LG Electronic's Channel Plus), and tablets and VR headsets.

Challenges of OTT in India

In India, the journey to change the media industry has begun. The technologies which are bringing changes in other countries are gaining popularity in India.  Although, India has become a telecom super power with over a billion connections but lacks behind in terms of Digital infrastructure.  India has seen the launch of OTT.  

The problems with emerging market such as India are that if people don’t get content at cheaper rates, they will switch to some provider and also to provide quality content as people want to see good content and not free content. 

 The challenges faced by India is video on memory card, downloads rather than just streaming. For mobile users the driving factor to use mobile data is the OTT services like Whatsapp and Facebook. These users are the ones which spend less than Rs 100/- on mobile recharges per month. For students, who use facebook as their first data experiment usually relies on free campus Wifi. 44 percent of Internet users in India use Whatsapp and 55 percent use Facebook. 

The famous OTT platforms like Snapchat, Vine and Instagram are gaining popularity but because of their heavy data usage and high data costs, these are not able to penetrate effectively. Other challenge is to provide free or cheap access to digitally-under deserve. Also, challenge continues to exists around physical infrastructure, digital access, content availability, user behavior, monetization etc. 

While there is a significant level of increase in building out OTT platform, viability in short term remains a concern owing to lack of digitization and high data costs.

However, with the expansion of digital infrastructure with 4G roll out, Govt Digital India campaign and multi private initiatives all these problems can be resolved.  

 The relevancy of Cable providers in the era of OTT

Consumers are no longer satisfied with flipping through the hundreds of channels included within their cable package, and accept faster delivery of content as well as the ability to pick and choose their programming. Cable operators have lost many subscribers in 2015 and instead of considering it as their end they should determine what consumers want from a media and entertainment provider and then develop a strategy to adjust accordingly. Cable operators need to consider why OTT streaming services are attractive to consumers.

Consumers are tired of paying a large monthly sum for hundreds of channels which they never watch. Consumers want the ability to watch content when they want to see it, not when the provider chooses to show it.

OTT content providers have left the cable behind by overcoming the inflexibility of cable and providing personalized and on-demand content. 

To meet the demands of customers, Cable providers need the back office infrastructure to enable the customers to personalize their relationship based on what and how much they watch.

The search functionality for TV shows and movies on cable services using set-top boxes is frustrating amongst cable TV subscribers as they have to spend a lot of time with the current equipment to find the content they want to watch. As per the users, OTT provides better job of organizing content and providing recommendations for programs, but because of large collection of content it becomes confusing and they flip back to cable TV.

There is also an issue of switching between TV inputs and remotes in order to access streaming services from their televisions. Cable companies have to come up with a single set-top box that integrates major OTT streaming services with traditional cable channels with one connection to the TV. 

The Regulatory aspects

In an endeavour to get stakeholders views on Regulatory Framework for Over-the-top (OTT) services, TRAI had issued a consultation paper on “Regulatory Framework for Over-the-top (OTT) services” on 27th March, 2015. The views on the framework are under consideration by the Authority. 

TRAI also released the “Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016” prohibiting TSPs from offering or charging discriminatory tariffs for data services on the basis of the content being accessed by a consumer.

In addition, the Department of Telecommunications (DoT) had also constituted a high level committee to examine the issue of net neutrality and other associated areas. The Committee submitted its recommendations vide a detailed report, which was released in May, 2015. 

The process of regulation is still on and is expected to be completed this year since entry of Reliance Jio has sparked a fierce competition in the market that will need an immediate control.

The New Dawn

The Indian OTT landscape was dominated by the advertisement based pay-per-view and freemium models. Entry of Netflix started the subscription only model which added new dimension to the market. The entry of new OTT players is expected to boost Indian independent cinema.  There are few OTT platforms currently running in India namely; HOOQ, Hungama play, Muvizz, Netflix, Yupp TV, Hotstar, Spuul, Eros Now, Box TV, Sony LIV, Ogle and Dittoo TV, Amazon Prime, Viacom’s Voot and Balaji telefilms ALT pertaining to Video on demand.

The OTT video services in India is primarily driven by changing preferences of viewers towards watching content as per their convenience and individual choices. The entry of digitally oriented companies, vertical integration by traditional media and telecommunication to offer their own OTT has led to increase in its adoption.   

OTT services overview.

• Netflix finally launched its subscription Video on Demand (SVOD) in January 2016. Netflix is currently offering three packages for Rs 500, 650 and 850 per month.

• Lukup Media primarily an IPTV platform launched its Video on Demand and broadband services priced at INR 990 per month in Oct 2015.

• HOOQ, a JV of Singtel, Sony pictures and Warner Brothers,  launched as subscription only VOD in India in May 2015.

• YUPP TV, provider of Indian content across the world, launched its  streaming service in India in Oct 2015

• Made-for-digital content producer The Viral Fever launched its own platform TVF play.

• OZEE platform from Zee Digital Convergence (ZDCL), the digital arm of ZEEL was launched in Feb 2016

• VuClip launched its OTT platform VIU in India in March 2016.

• Viacom 18’s ad funded VOD platform, VOOT has been launched in March 2016.

• Amazon prime with prime videos along with the gamut of other services is also available since July 2016.

Youtube continues to lead with maximum share of online video viewership and online video advertizing revenues.

While a majority of videos are reruns of TV shows or movies or user generated content, platforms and content creators are beginning to leverage the growing viewership to offer original content for the internet audience. These made for digital video offerings are varied with everything from episodic web series, stand-up comedy, sketches, movie reviews and short movies. 

NEW MEDIA SERVICES MAKING NEWS

Anticipating a surge in OTT take up in India due to fast growing smartphone users, most of the large broadcasters had launched their free OTT services two years ago. They carried their  already televised content on OTT platforms free of cost to let the users experience the availability of content anywhere and anytime on the mobile devices. Zee started the first ever OTT services in India called 'ditto TV'  with live TV channels and video-on-demand in February 2009 Sony Pictures started “ Sony LIV” in 2013” Now, Star came up with Hotstar in February 2015. All these services are slowly turning to subscription model. 

In a world with 2 billion connected devices, no wonder TV has moved over-the-top (OTT). OTT TV providers, however, face a daunting task in delivering across the device landscape: they need to cover OTT video services for the iPhone, Android and connected TVs of all kinds, and for Windows and Mac alike.

VMate, a new app to provide HD copyrighted movies was launched in India with Irfan Khan’s Madari exclusively in HD on 31 August 2016.

 Directed by Nishikanth Kamat, ‘Madaari’ garnered huge praises from the fraternity upon its release and minted Rs 30.60 crore at the domestic box office in its very first week.

VMate allows users to stream a movie online or download for later use, across different qualities, from 1080P to 144P. Users can also share these movies offline, through ShareIt APP, Xender APP, Bluetooth etc. 

 HbbTV and Smart TV join for common specs

To enhance the customer interactive experience, two trade unions, Smart TV Alliance and HbbTV association have come together to merge the activities of the Smart TV Aliance into HbbTV which address over-the-top services.   

Both these unions have enjoyed success as individual organizations and there are around 58+ million TVs connected with SmartTV alliance specification and there are about 6000 developers who have registered to use its specification. Thirty million devices use HbbTV specification to access 250 apps which are deployed in 20 countries. The combined leadership of the organisations will bring a more efficient approach for developing OTT services across the industry for manufacturers, broadcasters, content producers and developers.

 Conclusion

While OTT video is one of the fastest growing services on digital platforms, everyone from traditional media companies to new media companies to telcos is betting on online video consumption going mainstream. On demand side there is a growing demand for flexibility in terms of type, timing and place of content consumption.  On supply side, there are a multiple of OTT video services catering to different consumer preferences while declining prices of smartphones and improving speeds of broadband are removing roadblocks of OTT media consumption. 

As content differentiation becomes key in a cluttered landscape, many OTT video platforms are betting on producing and acquiring original content to gain users and build a loyal subscriber base. However, monetization remains largely advertizing driven and paid models continue to see consumer resistance, given high cost of bandwidth and low cost of cable television.

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