OTT enhances operator VOD

On-demand services from pay-TV operators are becoming more robust each year with more free content and integration of over-the-top (OTT) services. IMS Research projects that in 2011, 72 per cent of VOD requests via pay-TV platforms will be free transactions. OTT content delivered via set-tops will account for a fair share of free transactions, as well as generating a forecast $48 million for pay-TV operators this year.

Study author, Anna Hunt, states, “OTT services are becoming one of the biggest threats to traditional pay-TV operators, and with devices such as smartphones and tablets proliferating the marketplace, consumers are quickly becoming accustomed to on-demand multimedia consumption. Offering a variety of on-demand services is now essential for digital TV operators that want to retain market leadership status.”

Common strategies of pay-TV operators include offering free on-demand content to subscribers of certain digital bundles and offering catch-up TV services via set-tops or online, and over the next couple of years, integrating OTT services into the set-top box for seamless multimedia delivery to subscribers. IMS Research forecasts that in 2016, OTT services delivered via pay-TV set-tops will generate $436 million in worldwide operator revenues.

In addition, direct-to-home service providers are deploying IP-enabled hybrid set-top boxes to allow for more on-demand content delivery. Hunt adds, “In 2010, we estimate that 37 million IP-enabled hybrid set-tops shipped worldwide, with 42 per cent of these being satellite boxes. This equipment is allowing satellite TV operators to stay competitive with cable TV and IP networks, which are better suited for 2-way interactive services such as VOD.”

IMS Research forecasts that the cable TV segment will account for the majority of on-demand service revenues over the next five years, although its share will decrease from an estimated 66 per cent in 2010 to a forecast 53 per cent in 2016, mainly due on-demand service uptake on the satellite TV platform.

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