Broadcasters' new dilemma is that viewers increasingly expect multichannel delivery everywhere on every device.
Viewership habits are dramatically changing as viewers demand their content everywhere and across multiple screens. The age of multiscreen and Over the Top (OTT) is here and with that comes both challenges and opportunities for broadcasters.
Emerging viewership habits are dramatically changing as viewers are demanding content everywhere and across multiple screens.Over the past six months, major players in the industry – including HBO, Univision, CBS, Turner and DISH Network – announced long-term strategies geared toward meeting viewers’ changing consumption and viewership habits.
These developments have signaled a seismic shift for the media landscape.We have officially entered the age of multiscreen and Over the Top (OTT), and with that comes both challenges and opportunities.
The number of viewers watching content via linear streaming and OTT remains relatively low compared to the number accessing content via traditional linear channels.Therefore, quality and reliability are not a huge issue at this time.
However, according to research by Morgan Stanley, the number of OTT-only households in the United States is expected to climb from eight million in 2014 to 14 million by 2020.
Meanwhile, the global OTT market, comprised of alternative programmers such as Netflix, is expected to grow from $5.8 billion in 2014 to more than $10 billion in 2018, according to research firm Infonetics.The firm states that OTT providers continue to challenge traditional pay-TV providers and are in the early stages of challenging market share of the traditional broadcast and cable providers.
The number of OTT-only households in the United States is expected to climb from eight million in 2014 to 14 million by 2020.
With that in mind, Viacom’s TV Here, There, (Not Quite) Everywhere study cautioned that while viewers may want to shift to the OTT model, OTT providers will face some technical hurdles as demand for their services increases.For example, a surge in peak demand for live streaming as evidenced by the Oscars and Game of Thrones have already highlighted technical barriers such as loading/buffering and crashing/freezing.
From a business-model perspective, this could prove to be a huge issue for media companies.If the quality and reliability of the content suffers, viewership could decline.As a result, advertising revenues for media companies could be negatively impacted.
Similarly, from an economic-model standpoint, sizing a distribution infrastructure for peak performance introduces higher operating expenses and/or a less-predictable cost model.Media companies now must determine how they will contain distribution costs and keep content secure, as it is disseminated over multiple screens.
Now is the ideal time to examine the technical and economic challenges that broad adoption of OTT and linear streaming present to broadcasters, programmers and advertisers.
This examination will reveal that satellite operators are ideally positioned with solutions to help broadcasters and programmers scale to meet new bandwidth demand and generate strong ARPU.
Once a media company starts to distribute content across multiple screens, the comparatively high distribution cost of unicast versus multicast may come as a big surprise.As a result, satellite’s multicast capability becomes a very compelling alternative.
A key benefit of using satellites is that a broadcast network can cover virtually every possible existing (and potential) viewer – at a nearly fixed cost – regardless of the number of viewers.
A segment of capacity on three well-positioned satellites can distribute a program globally to the network last-mile edge, covering virtually every possible existing (and potential) viewer – at a nearly fixed cost – regardless of the number of viewers. With satellite, the delivery of content to the last mile for media companies will be secure, accessible and of a high quality.
The ability to monetize content over alternative distribution platforms is still quite uncertain, even as audiences continue to grow.Therefore, one could argue that most content providers would rather have a fixed cost base providing global coverage (and thus minimal incremental cost per user or format), than a highly variable cost structure where surges in cost might not be matched with predictable revenue streams.
Once media companies examine these scenarios, they will need to make sure they deploy the right technology to support a multicasting environment.This will be particularly important as more viewers are expected to go online.
A Closer Look at Content Distribution
The Internet and conventional content distribution network (CDN) infrastructure is a powerful tool for the distribution of OTT media.But as the industry moves into the level of service required for linear OTT distribution and advertising-based business models, this approach simply does not scale.Unplanned traffic surges, such as those from live linear events and news, can stress the terrestrial CDN.
The Intelsat 30 / DLA-1 satellite was launched on October 16, 2014 and soon thereafter started service at its location of 95° West for DirecTV Latin America.
Just as the traditional business model is changing, so must the distribution model.Today’s satellites are poised to support the distribution model of the future.As rapid changes continue to take hold, hybrid satellite services offer a compelling value proposition for those broadcasters and programmers migrating to linear streaming.The attributes that have allowed satellite to scale in the past remain relevant today.
For example, a hybrid satellite solution is a perfect complement to fiber and cable infrastructure, supplementing current CDN and fiber-network limitations.Satellite also has a long and proven track record of delivering large-scale transmissions that are high quality, reliable and secure – regardless of the screen.
These service attributes are critical to advertisers that are shifting their dollars to digital and mobile advertising.A hybrid satellite network helps with the quality of delivery, reflected in reliability metrics that can exceed 99.999 percent.With its end-to-end solutions, satellite-based solutions provide media companies with more flexibility in terms of the modes of transport.
For example, current CDN unicast-focused delivery business models rely on bits delivered per user that are variable attributes. Satellite distribution enables content owners to deliver linear multicast streams close to last-mile networks while providing predictable distribution costs, with a non-variable, fixed monthly charge – regardless of the number of purchases of content.
The Flexibility of Hybrid Networks
Satellite operators have long recognized that one of the biggest challenges facing our media customers is the need to distribute in multiple formats for the growing multiscreen environment.
This Intelsat teleport is located in Riverside, CA.
To meet that challenge, Intelsat built the IntelsatOne terrestrial network to complement current satellite services.The network includes managed services based upon fiber, fiber-plus-satellite, and teleport services.
Ultimately, we believe that satellite, combined with the current infrastructure, will also facilitate new targeted advertising opportunities for media companies by transporting and distributing customized, broadcast-quality linear streams via OTT to multiscreen devices.
This requires satellite to devise network solutions that have different processing capabilities and equipment that are much closer – or as part of last-mile networks.In the case of OTT, top satellite operators must continue to evolve their services to efficiently transport and distribute the many different media formats for the multiscreen environment.
Behind our expectation that the growth of OTT will expand its market are clear indicators that traditional linear advertising-based television will be viewed on multiscreen devices.
Satellite has the unique attributes needed to supplement terrestrial infrastructure limitations to meet media companies’ increasing requirements for large-scale, broadcast-quality linear content.
By combining efficient capacity provisioning and management with transparent caching – and enhancing its network capability at the edge – satellite is positioned to more flexibly support the many different types of media formats needed for OTT distribution.
Satellite has always facilitated the dependable transport and distribution of broadcast-quality content and has successfully adapted its business models to meet media customers’ evolving requirements.Examples of this flexibility include transitions from SD to HD to 4K.
New, high-throughput satellite systems promise greatly increased bandwidth efficiency and far greater capacity in orbit compared to a few years ago.
This year, satellite companies will demonstrate how satellite is the most effective point-to-multipoint, content-distribution platform for traditional media – while showing how OTT applications can be supported via hybrid-satellite networks.
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