Post # 3. About OTT



Alexander Sazhyienko, Product Manager of Stalker Middleware, shares his view on the future of IPTV industry and the growing role of OTT services.

— How do the preferences of TV viewers change?

— Modern viewers dislike the limited choice of content and linear TV programs. They want to watch whatever they want, whenever they want. Many analytical agencies predict that there will be almost no distinction between linear and non-linear TV by 2020.

Linear TV will still exist, but its audience will mainly consist of the older generation. This outcome is grounded in psychology: older people are spectators and prefer to use «good old» technology rather than exploring new products. It is the youth who will determine the future direction of TV because they are more flexible and tech-savvy. They will demand more freedom and opportunities. OTT and VoD services will flourish as they give their subscribers the choice of when, where and what content to watch.

— Has the content-watching experience changed?

— For sure. Previously, most viewing occurred in the evenings. Now in a typical scenario, a viewer watches a film on his iPad in the morning while having breakfast. Then he continues watching it on his Android smartphone in the subway and finishes watching it on his laptop during his lunch break or at his friend’s home on a media player or Smart TV. The number of TV viewers is constantly increasing due to the availability of Internet-devices at reasonable prices. Currently the number of users exceeds 1 billion worldwide, and it is common for every family member to have at least one gadget.

— How do these changes influence the broadcast format?

— It is clear that content doesn’t depend so much on devices anymore; now it is more user oriented. Personal subscriptions replace household ones. People want access to the content they pay for wherever they are and on whatever device they have, whether it is a TV, smartphone, tablet or smart watch.

People want access to the content they pay for wherever they are and on whatever device they have, whether it is a TV, smartphone, tablet or smart watch.

Thus the modern operators have a considerable number of requirements to fulfill regarding media content and its delivery to a plethora of platforms. And it is beneficial to legal services first of all.

— Why are legal video services interested?

— An increasing number of viewers are ready to pay for the high-quality content and extra convenience provided by legal operators. The advantages of these services include multiplatform options, delayed viewing and flexible models and payments; however, their main advantage is their stability. While the market was getting established, users tried out many services, got used to many interfaces and then became terribly disappointed when an option was removed because of copyright infringement.

Gradually even people in countries with a low standard of living realized that content must be paid for and began to include subscription rates in their monthly budgets. And it is not such a tough decision when you receive excellent service for your money.

— Which problems do operators face?

— It is assumed that OTT business is less technology-dependent than traditional telecoms. It doesn’t have its own delivery infrastructure as it is conducted by using other operators’ channels. However, that doesn’t mean that there are no technology problems.

OTT operators are required to make substantial investments at the entry level: a well-built infrastructure, system implication, multiplatform support, integration with billings and CDNs, recommendation systems, partner programs and content and advertising aggregators. This means that an OTT operator must hire many people to make their business a success.

But, to me, the main difficulty is acquiring the first critical mass of users. These users create the necessary income for OTT business success, and their acquisition should be a priority. Big OTT projects are now expanding beyond their countries of origin. YouTube, Netflix, Apple iTunes, Google Play and Amazon Prime are all vying for an increase in their share of the global market.

— Do local OTT operators still have a chance to succeed despite having such strong competitors?

— Global services also have their own weaknesses. Localization is a big problem for global OTT services and can be crucial in many cases. Moreover, their subscription fees are often higher than those of a local operator. This leads us to conclude that big market players are fighting not for subscribers’ money but for territories. They enter the markets without being ready to acquire the local audience, and this helps local services to develop freely. Niche projects should also feel secure. Their specific content matches the interests of small audiences who are not worth the effort of big services.

— How will the IPTV/OTT equipment market change?

— Regarding user devices, set-top boxes won’t lose their popularity. Mobile platforms such as Android and iOS will be in increased demand by attracting those who never spent a lot of time in front of TVs.

The most demanded operator solutions will be PiP, Catch up, Timeshift and maximum multiplatform.

High-quality video compression algorithms will also develop. However, the buzz around 4K will die down because it is more of a showy trend than a necessity. To become common, it will need at least 5 years. This type of content is too expensive to produce and deliver.

— How did OTT popularization influence Stalker Middleware?

— We are vigilant of profile market developments and attentive to clients’ demands. Our solution helped many starter operators launch their projects. Some of them have even become major national services.

However, as time goes by, the product that was so helpful before can become obsolete. We realized this in time and have striven to make Stalker Middleware compatible with other services and able to support each new IPTV/OTT project.

In 2016 it received a new user interface, new architecture that enables independent control of different elements, a set of apps for Android and iOS, a Tizen app and advertising partner integration that helps to generate extra income.

— What are your plans for 2017?

— In 2017 we are launching an official client for TV, Roku, LG WebOS, AndroidTV platforms and web browsers. It will help operators who use our platform to provide coverage for the maximum number of devices and will provide the services that in the highest demand in today’s market.



P.S. Infomir is happy to introduce the pilot issue of the BROADVISION — our quarterly analytical online magazine. Basing on the results of marketing surveys conducted by world’s leading research organizations, our experts have mapped out the major development vectors of the TV industry for the next 5 years.