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Analysis

Effectively managing the OTT challenge in today’s market

15 June 2016
Ian Munford, Akamai

Whether a company is a broadcaster delivering OTT services, a pure-play OTT provider, it is likely to find it increasingly difficult to stand apart from the competition. This is because there is little separating one service from another in terms of programming and pricing. As a result, video streaming quality and a stellar user experience on every device are becoming key differentiators. This means that the mandate for these businesses to stand out from the competition is ensuring the best quality video delivery and fast, uninterrupted experiences on all devices anywhere, whilst doing so cost effectively.

Viewers have so far been forgiving around issues such as video buffering. Today’s audience, however, are increasingly accustomed to sophisticated multimedia experiences in various formats and venues. As a result, they don’t care about the reasons why the quality of an OTT service is less than optimal; they only care about having an immersive and uninterrupted video streaming experience. Most OTT providers prioritise their investments in areas such as delivering HD video, stereo sound, and application usability to satisfy consumer expectations. However, in the process, they often underestimate the challenge of delivering quality video, and by doing so, they may be overlooking a prime opportunity to set themselves apart.

The value of quality video delivery

VoD is quickly becoming a key part of our entertainment mix, especially on smart TVs. But as consumers start to pay for access to online video, they expect a broadcast quality experience. Just as they have long shown little tolerance for poor retail experiences online, they show frustration with poorly designed user interfaces for VoD sites or apps, slow or sluggish access to online video, and poor quality playback. In fact, research by Accenture shows that 83 per cent of digital consumers get annoyed when experiencing TV interruptions due to poor internet broadband connections at home. Poor streaming in today’s hyperconnected world can have devastating effects. With so many options at their fingertips, consumers are quick to abandon a negative viewing experience, minimising the likelihood that they’ll give the service a second chance.

Whether SVoD or TVoD, OTT providers need to deliver high quality streaming video in order to remain relevant in the new market. This need to deliver broadcast quality content is spurred by numerous trends, including the propensity to watch premium video on smart TVs and the growth of USB services/connected devices. As OTT services start to replace traditional broadcast subscription services, viewers expect the same level of quality. That means OTT service providers must ensure that their videos play without fail, starting up quickly and delivering without interruption. It’s no wonder broadcasters now pay attention to different metrics.

Why it’s difficult to deliver premium content online

The same internet delivery challenges that have plagued organisations across industries for years are hampering efforts to consistently deliver broadcast quality video online. Today, many OTT services are prone to video re-buffering because of the unpredictable nature of the internet and last-mile bandwidth connectivity to the consumer device. As IP video is poised to drive an unprecedented surge in bandwidth usage by 2018, OTT video providers face even more challenges and uncertainty.

How an OTT distributor improved quality and boosted business

Wuaki.tv addressed the challenge of delivering quality video streaming online by working strategically and collaboratively with Akamai. Wuaki.tv sources content across a range of major content distributors – from Hollywood studios to local players.

As Jordi Miró, CTO for Wuaki.tv explains, “offering the best possible content and new services for our target audience on a well-designed, high-performing platform is essential to business success. But none of these matter if the quality isn’t there.”

To that end, Wuaki.tv established a quality metric for its OTT service and is now able to directly link improvements in online video quality to business and commercial success. Historically, Wuaki.tv had implemented a multi-CDN strategy.

It hosted its own origin and used multiple CDNs for delivery to ensure a level of autonomy and business continuity. As they analysed the contributing factors to poor KPI metrics, it found the interdependencies and inconsistencies between different suppliers to be a primary factor and so turned to Akamai for help. As Jordi explains, “after delivering its OTT video via Akamai’s video CDN, Wuaki.tv experienced a 60 per cent improvement in these KPIs, yielding a 25 per cent increase in customer satisfaction and a 30 per cent increase in revenues. Moreover, the company has seen a rise in customer advocacy around its services.”

As the OTT market matures, and with higher quality online video formats becoming the norm (for example, 4K and UHD), the industry needs to rethink how it operates. Quality streaming video delivery has a direct impact on repeat business, revenues, and consumer advocacy. While the stakes are high, so too are the challenges, namely internet congestion and latency along with delivery to multiple devices and platforms. However, in return for their investment in video streaming quality, OTT providers can expect lower viewer abandonment, higher viewer engagement, and a greater percentage of repeat viewers, yielding higher revenues.

By Ian Munford, product marketing director, media, Akamai

Munford will be leading the Akamai webinar ‘Navigating the OTT 2.0 Landscape’ on 23 June, which is open for registration here.

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