Sparked by increasing broadband penetration and rising connection speeds available to a growing percentage of the world’s population, over-the-top video has seen phenomenal growth in very recent years. A new study from ABI Research forecasts the number of viewers who access video via the Web to nearly quadruple in the next few years, reaching at least one billion in 2013.
“The rapid expansion of broadband video creates opportunities across a number of market sectors,” comments senior analyst Cesar Bachelet. “A wide variety of actors aim to gain a share of this fast-growing market: not only content owners such as the BBC and NBC Universal, and Internet portals such as AOL and Yahoo!, but also a range of new entrants including user-generated content sites such as YouTube and Dailymotion, broadband video sites such as CinemaNow and Lovefilm, and Internet TV providers such as Apple and Zattoo.”
Increasingly, the methods used to deliver this content are changing, in order to reduce the strain on broadband networks. These include content distribution networks that cache content closer to the user, peer-to-peer networks which leverage users’ PCs, and hybrid networks which combine these two approaches.
This proliferation poses a challenge for traditional pay-TV operators. They cannot afford to do nothing. According to Bachelet, however, “Pay-TV providers should refrain from knee-jerk responses, or adopting defensive measures aimed at discouraging consumers from using those services. That would only produce resentment from subscribers and likely defections from their services.”
Instead, he recommends something of an “if you can’t beat them, join them” approach, aimed at turning the threat into an opportunity. Particularly for those who own broadband infrastructure, PC-based services can be an ideal complement to their core business. “They can offer access to content via this increasingly popular alternative platform,” says Bachelet. “They can offer content beyond that available through traditional channels, and they can reach a new set of subscribers.”
They can also adapt Web content for distribution via their traditional model, and include advertising support.
ABI Research’s new study, Over-the-Top Internet Video Strategies for Carriers outlines the various strategies carriers can adopt to capitalize on the wave of broadband video services, thus turning a threat into an opportunity.
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