Video consumption and business model for OTT is the new mainstream, says Jacques Le Mancq, president and CEO, Broadpeak
The pay-TV industry is changing rapidly. Research from Park Associates found that 57% of consumers in US broadband households subscribe to an OTT video service, and the recent growth in OTT video consumption isn’t just a phenomenon in the United States. All over the world people are demonstrating a growing appetite for viewing content anytime, anywhere, on a wide range of IP-connected devices. As consumer demand for OTT viewing continues to increase, traditional television operators are adapting their business models to reflect these changes.
A major challenge facing the industry is whether content providers and operators can work together to deliver a compelling video service while improving their bottom lines. Clearly, content providers and operators need to create a relationship that is beneficial for both parties.
At Broadpeak, we think that the successful approach taken by big players like Netflix can be reproduced at a local level with regional content providers. By putting local caches directly in the network of operators that generate the highest audience, content providers can greatly reduce their fee toward CDN service providers, while improving the quality of experience (QoE) for the network operator’s subscribers.
The caches can be dedicated to one single content provider or be shared among several, in order to keep the operational complexity low in the data centres. This service can be monetised by the network operator, at a fraction of the cost that was previously charged by CDN service providers. Operators paying transit fees for content coming from outside their network will also see their costs decrease since the most popular content is cached.
Another way content providers can have more control over the delivery of their content is subscribing to a multi-CDN approach through the use of a CDN selection solution. Employing a multi-CDN approach is highly beneficial for OTT multiscreen delivery compared with relying on a single CDN.
There are several reasons for this. Oftentimes, the best CDN for delivering video content in one country may not be the same for another region in the world. Additionally, some CDNs perform better with certain subscribers, and some are more expensive than others but provide a better quality of service, which is critical for delivering premium content. Enabling operators and content providers to balance traffic between multiple CDNs ultimately makes sense from both a QoE and cost standpoint.
A combination of both methods is ideal: a well configured CDN selector can elect the local cache of an operator when the content is available there for an on-net subscriber, and the best CDN service providers can be selected dynamically when it comes to delivering content off-net, ie. outside of the operator footprint.
The rising consumer demand for OTT multiscreen services is making a big impact on the industry. Operators and content providers that work together, deploying advanced CDN technologies that are capable of delivering video content anytime, anywhere, on any device and over any network while providing a superior QoE to customers, will ultimately be successful in driving new revenue and increasing subscriber satisfaction.