OTT ‘offers more opportunities than risks’
August 1, 2013
Incognito Software, a global provider of broadband software provisioning and service activation solutions, has released The Growth of OTT Content: Opportunities and Challenges for Service Providers, a report detailing the findings from its recent ‘OTT Challenges and Opportunities’ survey, which examines the impact that over-the-top (OTT) content is having on the current business models of cable and broadband operators. While industry narratives portray OTT content as detrimental to cable and broadband providers, nearly 70 per cent of providers surveyed recognise new business opportunities presented by OTT services, far outweighing the number of respondents who acknowledge the competitive threats.
Incognito Software fielded the ‘OTT Challenges and Opportunities’ survey to understand the impact that the rapid adoption of OTT services is having on subscriber bandwidth usage, as well as how cable and broadband operators are adjusting their subscriber monitoring and data management strategies — or are planning to adjust them over the next 12 months — to capitalise on this trend. To obtain a comprehensive view, the company polled operators of varying sizes — ranging from regional players with up to 100,000 subscribers to large operators with more than one million subscribers — and included companies across North America, Latin America, Europe, the Middle East, and Africa. Notable findings of the survey include:
OTT is driving network capacity upgrades. Nearly 82 per cent of respondents have already upgraded their network infrastructure to cope with increased subscriber bandwidth usage.
- Of the providers who reported growth in bandwidth consumption, 75 per cent attribute this increase to streaming video sites. This is consistent across operator size and geographic location.
Fair usage is the most common approach to managing OTT consumption. On a global level, the most popular strategies employed to manage OTT are fair usage policies (40 per cent), followed by bandwidth caps (34 per cent), and proprietary OTT services (22 per cent).
- Proprietary OTT services and service add-ons — such as unlimited video streaming or speed boosts — are expected to see the most growth in adoption rates over the next 12 months.
- The vast majority of respondents employ more than one strategy, or plan to employ more than one strategy in the future (70 per cent).
International operators are more likely to view OTT as a threat. While the majority of respondents agree that OTT allows for the creation of new services and revenue streams, some operators — particularly those outside North America — believe that OTT presents considerable risks.
- Nearly half of all concerned respondents in Latin America are most anxious about bandwidth consumption (47 per cent). Their most common methods of managing these risks include fair usage policies (63 per cent), bandwidth caps (58 per cent), and proprietary OTT models (53 per cent).
- More than 40 per cent of the respondents in EMEA are most concerned about losing content to OTT providers (43 per cent). Their most common methods for managing this risk is through the use of proprietary OTT services (62 per cent) and fair usage policies (48 per cent).
- Half of the providers in North America utilize bandwidth caps as their primary means of managing OTT. Fair usage and service add-ons are the next most common approaches (33 per cent).
Most operators only use one type of network monitoring tool. While a variety of network data sources are available to understand network usage, nearly 62 per cent of respondents reported using only one type of monitoring tool, raising questions about the way providers are analyzing OTT bandwidth consumption.
“The widespread growth and popularity of OTT content across multiple devices is forcing cable operators to rethink their business models and how best to add value to their subscribers — and the survey results show that there is no single answer when looking at operators of different sizes and across multiple geographies,” said Stephane Bourque, president and CEO of Incognito Software. “Whether operators take a positive or negative view of OTT content, one thing is constant: their network usage is going to increase. Investing in better bandwidth monitoring and management tools will allow them to offer more customised services on a per-subscriber basis, which will ensure customer satisfaction and loyalty in the long run.”