Authored by Jérôme Blanc, Executive Vice President, Compression Products
Should traditional TV broadcasters stick to their legacy distribution model (satellite, cable or DTT, essentially)? Or is it time to move on?
More and more people of all age groups are dropping broadcast sources such as DTT. They are connecting their TVs through their telecom providers’ set-top boxes. In other words, they are switching to IPTV.
Meanwhile, an increasing number of users, especially younger ones, don’t even care to own a TV anymore. They are watching programmes on their laptops or mobile devices, usually referred to as second-screen devices.
But above all, today’s viewers are done with the conventional multicast model, where everyone gets the same TV streams with fixed schedules. Viewers want to see what they want (choosing their own content, whoever their Internet access provider might be), when they want, and are therefore developing a fast-growing appetite for replays and catch-up TV. In other words, they are embracing OTT.
Who gets the ad revenue?
This has several consequences for traditional broadcasters sticking to DTT or cable. First, they are losing direct control over their audience, with telcos now acting as a go-between. Even more damaging, broadcasters are losing their ad revenue streams, which are gradually shifting to the telcos’ OTT platforms. Ever noticed the increasing number of commercials popping up before or during a replay?
Broadcasters and content providers who want to regain full control of their business, bypass the middle man and reach out to their viewers directly have a one-stop shop to obtain the relevant technology. Indeed, Anevia provides the hardware and software solutions to produce an end-to-end OTT delivery chain. This includes encoders and packagers to generate the media streams in the right format, as well as DVR solutions to enable catch-up TV features and CDN solutions to push content to their viewers, while addressing latency issues and DRM provisioning.
OTT technologies also enable dynamic ad-insertion. Broadcasters can regain control over their advertising value chain and even increase revenue through targeted advertising.
Broadcasters can slash costs
Also, switching to OTT makes sense from a cost stand point. The overheads of maintaining an OTT infrastructure are nowhere near what it takes to maintain a satellite or DTT delivery chain. Some broadcasters already did the maths. France 4 is no longer accessible over DTT and only reaches users through IPTV and OTT. The same is scheduled for France O within the next two years.
Are aggregators history?
Content will increasingly be accessible over the Internet through broadcasters’ websites – on laptops, mobile devices or connected TVs. However, there will always be aggregators of some kind. But I expect that the Internet model of content searched through Google or other search engines will become mainstream for TV content as it is today for web content.
And for those broadcasters who would be tempted to go for the cheapest option and rely on YouTube or Facebook Live’s infrastructure to go OTT, they need to remember that they will once again lose control of their ad revenue streams as well as their viewers, as YouTube and Facebook rake in most of the chips and control who sees what.
Maintaining full control of the business really boils down to owning and maintaining the delivery chain. In other words, setting up and managing a proprietary OTT infrastructure – a highly cost-effective and hassle-free method of securing your long-term business prospects.
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