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Why telcos need partners to launch OTT services

20 December 2016
Why telcos need partners to launch OTT services

The UK telecoms market is more competitive than it has ever been, with new service providers challenging the traditional telcos by offering enhanced entertainment services through OTT. Research indicates that 64 per cent of telcos highlight competitive pressures as the biggest challenge they expect to face over the next five years. But what if this increased competition could be turned into an advantage?

Partnerships save money and time               

A common strategy adopted by some telcos is to approach OTT providers directly to secure individual content partnerships. However, operators are discovering that many of these content partners come from a pay-TV world – for example the WWE and UFC – and they want a minimum guarantee of revenue in order to add their content.

There is an alternative. A successful strategy is to approach these content owners on behalf of the telcos, and help educate them that though they will receive less revenue upfront, they will get to keep the majority of the revenue generated and be able to push content on the platform. This negotiation process is best carried out by a team that has OTT in its DNA and has been working on hybrid solutions from the beginning.

The main expenditure for telcos that deal directly with OTT providers is the integration of services to the platform. Working with an established partner that has already developed the solution to host, package and deliver a service simply cuts out this cost.

As well as being expensive, establishing partnerships directly between content owners and telcos can be time consuming and, with the number of new content services coming on-stream, it can prove a huge drain on resources. Partnering with a service provider can give telcos the access to the wide range of channels that they need to supplement traditional linear feeds.

Partnerships help you keep up

Once a partnership is in place and the service has been launched, the next step for telcos is to keep track of developments and innovations in the industry and make sure its services are kept updated. The nature of OTT means that there are always new services launching or old ones disappearing, and that means having to effectively maintain the service in order to adjust to the changing demands. Having a partner takes the load off the telco.

One thing Netgem has seen time and again is that the biggest pain point among viewers is spending too much time looking for programming to watch. While this is hardly a new issue, the problem has been exacerbated, especially on those services that require the viewer to go into each player individually. To combat such usability issues, an effective method is to install tools that recommend and push programmes to the viewer straight out of the platform and combine these functions with content search, and that these cover both linear TV and OTT providers. The industry is constantly evolving and finding new ways to improve the viewing experience, and telcos need to adapt.

The best way to ensure a single consistent viewing experience that combines different OTT programming is through a partnership. This can include surfacing live programmes delivered via OTT to the main TV service. By working with a partner to help surface content and use metadata effectively on the channel list and EPG, operators can remove the app from the viewer’s television UI and so they just see the content as another channel, which can help to create a market differentiator for the operator.

The technology itself is also a differentiator for the telco service. Integrating OTT by working with a partner puts telcos in a much stronger position by providing enhanced features, for example integrating OTT services that go beyond just having these delivered through an app.

Partnerships improve marketing

An often overlooked element of these partnerships is content marketing. One of the main reasons to integrate OTT services is to be able to offer a variety of programmes that appeal to the widest range of consumers. By having established partnerships, with new content providers telcos can market their services through the provider’s shows.

The boom in OTT makes keeping up with the pace of the industry a daunting prospect. With the rise in the number of OTT service providers, it is understandable that so many telcos fear growing competitive pressures, but the right partner can combine the learnings from all of these new and different approaches and provide the right content.

By Sylvain Thevenot, managing director, Netgem Europe

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