OTT Goes Mainstream

Smart TVs with embedded set-top boxes have become popular. The number of people using OTT video has increased in leaps and bounds. In 2013, 400 million people were using OTT video, which is more than the total number of people subscribed to IPTV. The number of people who watch long videos on mobile devices also exceeds 400 million, and these people spend more time on mobile devices than watching TV sets.
Will OTT video go mainstream? Let’s look at it from the perspective of network operators, content providers, and equipment manufacturers.
In 2013, Netflix expanded its user base to more than 40 million by releasing House of Cards. Currently, Netflix is rapidly developing more paid services. Four years ago, Google TV was struggling against pay TV because Google lacked core content. This once again proved the universal truth that “content is king.” Similarly, Apple TV and Microsoft TV have both survived by depending on pay TV services.
ESPN content has been disseminated on OTT networks; people can subscribe to watch ESPN on mobile terminals. HBO GO enables people to enjoy premium content online through OTT. Video services have broken through the limitations of traditional pay TV packages.
Netflix and other content providers are focusing on premium content, such as live channels, and this is forcing traditional pay TV operators to reform. Traditional packages are expensive and include a variety of content, some of which may not be wanted. People usually only want to watch the content they are interested in. A customized package, comprising, say, a combination of local channels, HBO, ESPN and Netflix, are often favored.
The main issues inhibiting the development of OTT video are being addressed, and OTT will develop more rapidly with its technical advantages. But will IPTV disappear altogether?
First, let’s look at the situation of operators. The number of broadband users has increased; higher bandwidth is now available; and FTTH is becoming a major access mode. In this scenario, there are three types of operators: those with good broadband but no content, those with good broadband and content, and those with limited broadband and possibly some content.
A recent discussion with a European FTTH provider revealed that operators with good broadband but no content seek to introduce many internet HD videos into their networks through open video service platforms (e.g., Android terminals). Bandwidth is the advantage for these operators, but content holds them back. Therefore, they seek to use a dual-mode terminal to receive local channels for free and transfer the Netflix and other content to end users through their own pipes. If end users become accustomed to OTT TV, the advantages of these operators will be brought into full play.
Then there are mainstream operators who have their own contents and networks. These operators are faced with competition from pipe and content providers. Operators in this category must prevent OTT content players from occupying the pipes. Such operators need to introduce content of their partners through the internet and transfer their own content via smart terminals and high-quality solutions. For example, these operators can provide appropriate packages that involve bundled mobile data. 
The category of operator is those with poor bandwidth but possibly with their own content (or needing cooperation on content). When faced with competition in terms of bandwidth, such operators can only retain their users through value-added video services.
It is a good idea for operators to introduce internet content through an open platform and provide their own content as well. Video services can be bundled with broadband services. 
Now let’s look at content providers, who play a leading role in the media industry. How should such providers sell their content? Except one-way satellite broadcast, other traditional methods, such as cable TV and terrestrial TV, are all limited by network resources. Satellite TV lacks interaction and selectivity; cable TV has geographical limitations; and terrestrial TV is restricted by both. Content providers used to cooperate with broadband operators in order to provide triple play service packages and expand service channels. However, with the development of broadband and popularity of OTT, this kind of cooperation is becoming less important for content providers. Big content providers are now acquiring broadband networks in order to provide interactive content. For example, Dish TV, Tata Sky, and Canal TV are all acquiring or building broadband networks. Will this trend be reversed by OTT? Let’s wait and see.
Technology and equipment vendors are asking themselves whether OTT will ultimately be the only choice. Video service integration is the main direction operators are moving in, and solutions should move in the same direction. Many emerging technologies, such as cloud computing, cloud media CDNs, and multimode Android smart STBs align with this trend.
The development of cloud computing and broadband networks makes cloud-based service platforms possible. Cloud computing and IDCs makes video services more reliable and also ensures linear capacity. Operators can save on network OAM and provide more flexible service models. Moreover, equipment manufacturers can easily implement OAM hosting, which is a development trend.
A cloud media CDN is a must for improving media quality. It not only improves media response speed and efficiency but also provides physical support for individualized network-attached storage. In addition, the transcoding function of cloud media CDNs supports variable bit rates of mobile streaming media and greatly improves the experience of viewing video on multiple terminals.
Smart terminals enable the openness and integration required by OTT players. With the development of chip technologies, the processing capacity of quad-core and octa-core chips support various software decoding technologies, and dedicated hardware decoding chips can be replaced in order to meet more exacting open-market requirements. Android provides vast choices for pipe-based service operators because a lot of OTT content on the internet can be integrated for users. Furthermore, Android enables operator content to be reliably transmitted through customized applications. A common practice is to install an IPTV application with traditional IPTV functions. For example, DVB-T can be used to include local and free channels in a user’s video services. Of course, there is still room for improvement in terms of providing high-level security.
In conclusion, OTT video will inevitably become mainstream, and IPTV will be a typical application. IPTV can only be provided by traditional operators who have both premium, customizable content and controllable bandwidth for reliable transmission.