The TV Story - How OTT Video Services and On-the-Go Content Are Redefining World's Best Loved Gadget

24 April 2015
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The TV Story - How OTT Video Services and On-the-Go Content Are Redefining World's Best Loved Gadget Image Credit: PCC Mobile Broadband

With all the buzz on OTT TV and the increasing use of mobile devices to stream video content, will the TV as a device lose its value proposition and be no longer relevant in our homes? The answer to this is simple. Yes, the TV in its traditional sense is losing its relevance, BUT in its place a new TV has started to emerge. Though most people will just refer to the new TV as the delivery of TV content in digitalized format - and hence the term Digital TV, the real new TV goes beyond format and resolutions. It is poised to redefine everything we know about this half-century old service - from content choices to viewing habits to how we buy and where we access our content.    

Traditionally, TVs are connected to either the broadcast TV, cable, the satellite or the IPTV service. These traditional TV services require dedicated connectivity and special decoding. This was when subscription to any TV service meant that the household must establish the necessary connection to a particular type of infrastructure - installing a fiber line or a cable connection, or putting up the receiver dish or an outdoor aerial - and must commit to long term subscription agreements. It also meant that there will be specific decoders connected to the TV.  

The new TV however, gets its content from OTT content sources available over the Internet, in other words, all its content is digital and is transmitted via IP connectivity. There will therefore be no dedicated connectivity infrastructure for the TV which will now share the home broadband connectivity, and streaming from the Internet is done via a compatible streaming device such as a media player, a smart phone, a gaming console or any other connected device that is able to read and share digital content sent over IP networks. The new TV becomes a screen that reads from multiple input devices, either via a wired or Wi-Fi connection. With the advent of smart TVs, the new TV can also have its own apps support and decoding capability, which enables it to stream, decode and play Internet content directly. 

So how does the new TV redefine our TV experience? This is where the growth of digital content and the Internet comes into play. Over the last 5 years, the market has witnessed a dramatic rise in the consumption of Internet video content - whether it is ad-sponsored Video-on-Demand Services (VoD) or subscription based VoD (SVoD). This includes the more recent debut of standalone OTT TV service such as HBO Go and online linear TV services, which continue to add to the breadth and the depth of online TV services available for ardent fans of video and TV content. Consumers are buying and renting online videos, streaming them for free from applications such as YouTube, subscribing to their favourite online movie channels for a constant supply of latest videos or are paying for a full online TV service that enables them to access a large number of pre-programmed videos on TV channels on monthly subscriptions, examples including Netflix, Amazon Prime and SlingTV.

What does this bode for the new TV? The increasing volumes of online video content means that the new TV which is tuned to the Internet will have an unending supply of content to deliver to its viewers. TV viewers of the future will hence have access to unprecedented levels of content choices - including apps - from every part of the world, in every genre, every language and for every taste. Due to this, national borders which played a significant role in determining what can be accessed on TV will become completely irrelevant.  In fact, the low cost of delivering content over the Internet given that providers have no connectivity infrastructure costs to bear and given that content can be distributed to the widest customer base, will push the prices of the internet TV to lowest levels (Netflix offers its services for as low as US$10 a month) and will attract many people to transition from the traditional TV to the new service. This is catalyzed further with never experienced before features such as 'catch up TV' and multi-screen which allows the same line-up of content to be watched one week later, across any device from any location. The term 'cord cutting' which is used widely among providers of online video and TV services refers exactly to this transition - more people are expected to move away from traditional broadcasting and Pay TV to OTT content including OTT TV services which can be subscribed on piece-meal, daily, monthly or yearly basis, and which has minimal set-up fees. By 2019, subscriptions from OTT TV are expected to generate US$31.6 billion, growing from just under US$8 billion in 2014, according to a recent research from Juniper Research.

The TV therefore is here to stay. If anything, it will emerge stronger from the convergence of the IT, communications and media sectors that is taking place today. According to Nielsen, a leading global information and measurement company that focuses on video and audio content markets, the TV screen is still the top choice for viewers for ALL forms of video content regardless of whether it is news, drama, sports, documentary or movies. Nielsen’s Digital Landscape Survey showed that respondents still prefer catching up all form of content via their TV sets, except for short-form video (content less than 10 minutes long) which the company says is accessed more from computers, mobile phones and tablets. Despite mobile devices being increasingly used to stream online content, ultimately, for households and family viewing, nothing replaces the experience of 'TV-ing' together, something that devices such as smartphones and tablets or even computers can never deliver. With the experience it brings, and with Internet now powering what it can play on its screen, the TV will continue to be a central feature of modern households.

Executive Editor of The Fast Mode | 5G | IoT/M2M | Telecom Strategy | Mobile Data Innovations 

Tara Neal covers stories on strategies and initiatives in the Digital Telco space, and anchors the 5G and IoT/M2M verticals on the publication. Tara holds a First Class Honours in BSc Accounting and Finance from The London School of Economics, UK and is a CFA charterholder from the CFA Institute, United States. Tara has over 20 years experience in technology and business strategy.

Follow her on Twitter @taraneal11, LinkedIn @taraneal11, Facebook or email her at tara.neal@thefastmode.com.

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