Global menu

Our global pages

Close

What are the potential benefits of OTT?

What are the potential benefits of OTT?
  • United Kingdom
  • Technology, Media and Telecoms - Media

27-06-2019

Part 2 of 4

(a) For Users/Consumers

Simply put, OTT services are low or free of charge services. Its known that online video traffic is on the growth due to simple accessibility and cheapness. Consumers’ hopes are also evolving as they are expecting the same quality of service provided by linear television on every device and to be freely accessible.

The pay-tv market in particular is facing significant challenges and threats since many consumers/users are electing to shift from premium subscription services with a preference towards cheaper OTT platforms. Additionally unauthorised/unregulated access to content only serves to increase the impact of such changes.

(b) For Mobile Operators/Network Carriers

According to a study prepared by [Juniper Research], Mobile Operator Business Models: Challenges, Opportunities & Strategies 2014-2019 - found that in a number of markets, including Italy, Spain and the UK, operator mobile voice revenues had fallen to less than 60% of their value five years’ ago. It argued that a combination of IM, VoIP and social media substitution was primarily responsible, resulting not only in lost revenues but in additional costs due to the scale of signalling traffic.

The same research provides that according to a recent survey of more than 60 mobile network operators worldwide, the global mobile operator opportunity for OTT communication will be worth $42.9 billion by 2018.

[A recent statistic states that by 2019 the OTT market will have doubled or more in almost every aspect and the number of global OTT subscribers will increase up to 333.2 million] .

Having said it is important to note that what's changing is the approach of Network Carriers around the globe towards forming OTT partnerships.

The primary expectation of mobile operators for partnering with an OTT service provider was to drive customer loyalty. The main aim of OTT partnerships is to meet consumers expectations while giving the chance to the operators to reclaim their lost revenues.

(c) For OTT Providers/Network Operators.

As consumers continue to rely on OTT communications as a mean of connecting, rather than their traditional phone plans, the future seems promising for “Network Carriers and OTT Providers partnerships”. As Network Carriers continue to open up to these opportunities, we expect to see new partnerships arrangements that will help put these carriers back in control and allow them to reclaim lost market share.

One of the main advantages that OTT Providers have over traditional television is the ability to measure the performance of their content in precise manners. OTT Providers clearly recognise (i) which programs and advertisements customers are viewing, (ii) the time they are watching and (ii) the means they are using to engage with them. Its perceptible that [the number of OTT viewers continues to grow. Sixty-nine percent of U.S. households have at least one television connected to the Internet via a smart TV set or other stand-alone device] .

One last comment on the advantages that OTT Providers can benefit from is that OTT services are not regulated and therefore the burden imposed on traditional telecommunications is lifted. In one word one can say that it is free from the sector-specific regulatory burdens applicable to telecommunications companies.

Read part 1: What is Over the Top Platform?

Read part 2: What are the potential benefits of OTT?

Read part 3: The challenges and considerations of OTT?

Read part 4: The regulatory positions of OTT - a global view

1. Source: http://blog.voxox.com/study-96-of-mobile-operators-see-the-benefits-in-ott-partnerships; https://www.juniperresearch.com/press/press-releases/operators-to-suffer-$14bn-in-lost-revenues-this-year

2. Source: https://www.revesoft.com/blog/english/mobile-ott-ruling-telco-operator/

3. Source: https://insight.equifax.com/promoting-advantages-ott-may-help-boost-advertising-revenue-ott-providers/

 

-->