What Distinguishes a Successful OTT Network?

More and more people worldwide have access to high-speed Internet and devices capable of streaming videos; mobile phones have made it possible for consumers to access content wherever they go. With OTT streaming more popular than ever, the market is competitive...

OTT, or Over the Top streaming (more simply known as video streaming); refers to any service which allows customers to stream videos from their PC or mobile device. Video streaming is one of the most common ways people use the Internet, and it is rapidly becoming one of the most popular ways to watch television. The most famous examples include Netflix and Hulu, but room still exists for start-ups and established companies to move into the market, especially in the emerging markets worldwide.

More and more people worldwide have access to high-speed Internet and devices capable of streaming videos; mobile phones have made it possible for consumers to access content wherever they go. With OTT streaming more popular than ever, the market is competitive. Businesses must ask themselves, what distinguishes a successful OTT network?

Emerging Markets

Several OTT content providers are well-established in developed countries, but great potential exists for growth in emerging markets around the world. Key areas include Latin America, Africa, the Middle East, Northern Africa, and Asia. In these areas, as in established markets, online video streaming is poised to overtake television in the delivery of video content. One key feature of the growing popularity of OTT content in these markets is that many new customers did not previously have television subscriptions.

Emerging markets are defined by their rapidly increasing levels of industrialization and economic growth, resulting in a higher per-capita income and an increased ability to purchase luxury goods and services. What this means for OTT video companies is that in emerging markets, absolute growth is high and expected to continue rising, while the competition remains low due to the following factors:

  • Currently, OTT is limited in emerging markets due to limited availability of broadband Internet; in the next 5 years or so, this will change.
  • In many emerging markets, awareness of on-demand content is low; this will also change in coming years.
  • Emerging markets are experiencing the highest levels of growth in computer sales, with the majority of desktop PCs being sold in emerging markets in 2012, with many families are buying PCs for the first time.
  • The cable industry plays a far smaller role than in mature markets. While the growth of OTT in mature markets is dependent on reducing the use of traditional cable, emerging markets present no such resistance.

OTT has several features that make it attractive to consumers in emerging markets. For families with limited – but not restrictive – incomes, the ability to meet all technological and entertainment needs using just the PC is important. OTT is often more affordable than cable, even when taking into account the cost of an Internet subscription. OTT content also allows customers to seek out local or international content as they see fit.

Companies should also remember that emerging markets present several challenges that mature markets do not:

  • In some areas, economic and political instability mean unpredictable changes in demand.
  • Less developed infrastructure can present a challenge, especially in rural areas; however, as development continues, these issues fade.
  • Perhaps the biggest challenge companies face in bringing OTT to emerging markets is less awareness of on-demand video in particular and subscription-based content in general. Awareness is expected to increase in coming years, but being proactive in this regard may be one factor that puts successful companies ahead.

Well-known OTT companies, such as Hulu rose in popularity despite traditional television carriers. This is not the case in the emerging markets. With the success - and potential threat - of OTT streaming proven in other countries, some television carriers are working to capture the emerging markets by offering OTT even to customers who didn't have a television subscription. Established companies like Netflix are offering OTT content globally, while new and/or local companies are also moving in on these markets.

In order to become a successful OTT company in emerging markets, it will need to offer a combination of local and international content and prices competitive with those of established companies. However, the best content and prices are moot unless the OTT network itself is rock solid.

Key Features of Successful OTT Networks

When looking at both emerging and current markets, it's important to ask: What distinguishes a successful OTT network? A consistent, powerful network is essential for customer satisfaction. If customers can't stream videos quickly and consistently, they will choose another OTT content provider. A successful network should have these basic features:

  • A healthy URL. Your URL should direct viewers to the content.
  • Effective monitoring to ensure a high bit rate and healthy stream
  • Effective management to respond quickly to any breaks in service
  • Servers equipped to handle your company's level of traffic and content

Whether your company is using OTT to stream just a few videos or thousands, keeping in mind these thoughts about what distinguishes a successful OTT network is important. These features help businesses gain and retain customers, both in established and emerging markets.

Joe Sucharda is vice president, corporate marketing, for broadcasting equipment provider Sencore.

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