OTT, taking plays out of TV/Broadcasters playbook

With Over-the-Top Internet-based programming having changed and adapted to TV viewing behaviour, quality-of-service is becoming the online TV industry's biggest challenge.

The newspaper industry has been disrupted by the Internet revolution, and today the traditional, purely "hard copy" publication is virtually extinct. However, I think the biggest casualty of the digital revolution may not be the papers. It could be television.

I am talking specifically about terrestrial television, which includes the free-to-air broadcast variety as well as the subscription-based cable kind. According to the 2015 Accenture Digital Consumer Survey report¹, TV has lost 13 percent of its audience globally in the past year, and 78 percent of consumers surveyed are already getting their daily dose of video online. What's more, by 2019, as much as 80 percent of all IP traffic will be video².

This shift in video consumption patterns is changing the global media landscape, with a dramatic shift being observed right here in Hong Kong. In fact, by 2020 the city is projected to emerge one of the top five biggest over-the-top video (OTT) markets in Asia³.

That's the good news. The bad news is that, as the audience gets bigger and more demanding in terms of video quality, everyone trying to jump onto the OTT bandwagon is faced with the same tremendous challenge because the Internet was never designed to stream videos.

Fierce competition in a small market
The way I see it, there are two main challenges to premium OTT market expansion in Hong Kong – fierce competition in a small market, and the expectations on quality of video.

The desire to go digital is felt by big and small players in the media industry in Hong Kong. We are already seeing increasing competition in the OTT space from local as well as international firms, and the number of players will continue to increase this year. Everyone is busy working out their next move.

PCCW Media's OTT mobile video entertainment platform, Viu TV, has recorded over 1.2 million downloads in Hong Kong within the six months after its launch last October (2015).

Looking beyond local players, the US media giant Netflix was recently made available in Asia, and Fox Networks Group Asia will also launch an OTT platform to feature Chinese-language programs. The Sports network ASN is also available in Asia via OTT.

Mainland company LeEco has also been making aggressive plans in Hong Kong, including paying for acquisition of rights to English Premier League and World Cup soccer games.

We've seen original content and rights offering as a differentiator, but the next change is delivering best viewer experience at scale. Already, some in the industry are saying that the OTT Internet boom in Hong Kong may be hard to sustain, despite the growth in digital advertising⁴. Is the Hong Kong market too small to support so many OTT platforms?

Consumer expectations
As stable as the Internet often is, and despite Hong Kong enjoying one of the world's highest connection speeds⁵, it is unpredictable and unreliable compared to terrestrial TV. The fact is that the Internet was never designed with the intention of streaming videos.

OTT video is delivered by multiple service providers across a value chain that is only loosely coordinated. No single provider is ultimately responsible for service quality and stability.

We are at a massive checkpoint here – the trend is moving from binge watching on OTT services back to appointment viewing. The new form of appointment viewing we are witnessing is real-time live broadcast and interaction, not just full season releases and library content (VoD).

In most countries, we already see social media becoming a major multi-screen activity while consumers are viewing their favorite weekly shows. With this consumer behaviour, it only makes sense that OTT service providers mimic program release strategy similar to TV from full season releases to daily or weekly.

As consumers continue to seek TV-like experience and to be active and constantly communicating, OTT services need to maintain relevancy and nowness with their audience. Consumers embrace anticipation and the unknown, a key determinant in how OTT can further help adapt consumers from traditional TV to OTT.

While it seems like a fairly simple enterprise to bring live TV to Hong Kong given that the infrastructure appears to be in place, broadcasting live to 7 million people simultaneously is no mean feat. Also, consumers' expectation for smooth and stable delivery of Ultra High Definition live TV has brought with it another layer of challenge to the industry.

Good quality video at scale?
In the short term, the major players in the ecosystem – such as content providers and content delivery networks – need to understand the limitations and provide solutions so that viewers can enjoy a good experience. They can do so by leveraging advanced technologies to address reliability, low-latency, multi-cast, and sustainability of video quality via the Internet.

In the long run, however, the private sector must assist in making sure that the scalability and reliability of the Internet measures up to the demands of viewers. That means ensuring that the key considerations for OTT workflow success – flexibility, reliability, scalability, security, and performance are in place.

¹https://www.accenture.com/t20150523T021027__w__/us-en/_acnmedia/Accenture/Conversion-Assets/Microsites/Documents17/Accenture-Digital-Video-Connected-Consumer.pdf
²https://www.cisco.com/c/en/us/solutions/collateral/service-provider/ip-ngn-ip-next-generation-network/white_paper_c11-481360.html
³https://www.media-partners-asia.com/AP14/AP14_Mediainfo.pdf
⁴https://www.scmp.com/news/hong-kong/economy/article/1904733/hong-kongs-ott-internet-tv-boom-may-be-hard-sustain-despite
⁵https://www.akamai.com/us/en/multimedia/documents/content/state-of-the-internet/q4-2015-state-of-the-internet-connectivity-report-us.pdf