The popularity of Over-the-Top(OTT) video services, whether it is Video-on-Demand (VoD) or streaming video services, is becoming increasingly notable in recent years. Spurred by the widespread use of smartphones and tablets that allow rich content to be streamed and accessed anytime, anywhere and the emergence of crowd-sourced OTT video Apps such as YouTube, more and more people are getting used to the idea of watching or catching up with their favourite shows, movies and video clips, via the internet.
Mobile data in this case has become the biggest catalyst in the OTT video market, namely because it brings these videos to personal devices on personalized apps (Youtube account, for example) or subscription plans (as in the case of Netflix, Hulu or Vudu), and via the tethering or pairing of these devices with media players that project the video content on larger screens such as home TV sets, allow users to share their content over a large number of connected devices as well as with a wider audience.
Parallel to the OTT video market is the OTT TV market, which sees incumbents in the TV space including IPTV, cable and satellite TV service providers launching their own online channels that can be accessed by their subscribers over fixed and mobile data connection. Most of these services leverage the digital content already provided on the original channels and are curated and adapted to online access, primarily to address the increasing preference among today's viewers for online content and also as means to address the competition posed by OTT video and OTT TV new-comers.
For mobile network operators(MNOs), the emergence of OTT video services provided the break needed by these players to enter the digital content market in a big way. Unlike OTT voice and messaging services which are reputed for taking away large chunks of operator voice and SMS revenues, OTT video services have always contributed to both increased penetration of smart devices, more takeup on data services and a higher demand for bandwidth and bigger quota bundles. And after 'transporting' third party OTT video services for some time, MNOs are now experimenting with their own OTT video and OTT TV services. In March last year, AT&T, US's second largest operator and the Chernin Group, a large investor in the media business and also a major stakeholder in Crunchyroll, a leading subscription VoD service, announced the investment of more than US$500 million for the formation of a venture to set up AT&T's own OTT video service offering. The initiative targets advertising and subscription VoD channels and streaming services, said the companies.
This week, Verizon, the largest operator in US announced its partnership with AwesomenessTV to bring content favoured by teenage and young millennials to its own OTT video service that is expected to debut soon. The OTT video service will also be featuring DreamWorksTV, which brings family orientated content. Verizon's move in the OTT video space, says the company, is driven by the 'mobile first' trend among the younger subscribers who depend on their mobile devices for anything that is accessed online, including video and TV content. Verizon cited a study conducted by CTM/University of Southern California which found a 12 percent increase in overall video consumption between 2013 and 2014, with 18- to 24-year-olds having the largest increase that nearly doubled the national average, pointing to a very important shift in video consumption patterns among today's young.
At the same time, within the OTT TV space, there has been a spree among a number of MNOs worldwide to launch subscription-based TV services. The line-up of Operator OTT TV services includes Tele2 Russia's Tele2 TV - a TV service that costs only 7 rubles(US$0.11) per day and which can be accessed via its downloadable Android App, Cellcom Israel's Cellcom tv service which is a multi-screen OTT TV and VoD service that brings customers access to premium movies from major Hollywood studios, offered on a monthly subscription plan and a similar OTT TV service launched recently by T-Mobile Czech.