When over-the-top (OTT) services were first introduced, it was known for being a pleasing way to reach out to TV viewers.
Today, however, it appear that nearly everybody is using OTT services, streaming video over the Internet without any type of multiple-system operator in control of the content distribution. And, they’re using the OTT services either to supplement the traditional pay-TV services or as a complete replacement for it.
According to the latest Parks Associates survey, seven percent of broadband households (8.4 million households) have a subscription to at least one OTT service but don’t pay for any pay-TV service. The demographic includes cord cutters – people who previously subscribed to pay-TV services – and to cord nevers – people who never subscribed to pay-TV services (usually college kids who have been raised on social media and Netflix and can get content whenever and wherever on any device. People of this generation tend to forgo the expensive cable packages.
Although the pay-TV impact from cord cutting could be considered minute, the survey shows 57 percent of households in the U.S. with broadband have an OTT service. This means that cord shaving is indeed a mainstream phenomenon. When there are OTT services in the home, pay-TV subscribers are likely to make cuts to their existing service.
Jay Samit, SeaChange SEO, told an NAB conference audience that there’s been a tipping point in the cable industry. He said cable companies make more money offering broadband service than the traditional services. He said Comcast has reached this point, as a good chunk of its revenue is coming from broadband Internet services.
With the industry getting to this tipping point, new approaches are necessary to give consumers the volumes of Internet video and OTT content they demand.
Giving users the OTT content they want from the original source is not an effective method any longer, even when helped by a worldwide CDN. This approach tends to result in network congestion and interrupts video delivery.
In order to be effective, the popular content needs to be delivered locally and brought closer to its subscribers. With the local approach, it means the network operator can provide a better quality of experience and have tremendous cost savings. With this delivery approach, consumers get a better viewing experience, which means better customer satisfaction with Internet provider.