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Cable Technology Feature Article

November 24, 2008

ABI Research: Huge Market Opportunity for Over-the-Top Video

By Michelle Robart, TMCnet Editor

With an increasing about of cable providers expanding their PC video offerings, satellite and telco operators are turning to over-the-top broadband video delivery as new way to remain competitive.
Both DirecTV and DISH Network rolled out over-the-top Video On Demand (VOD) on Internet-connected set-top boxes this past year, while telcos in Europe have been integrating digital terrestrial linear TV broadcasts with broadband video for VOD.
According to ABI Research, as broadband video offerings increase in quality and become more seamless, carriers could play a significant role in the over-the-top video delivery market.
Michael Wolf, a research director for ABI Research (News - Alert), believes that carrier-packaged over-the-top video delivery is becoming a reality in many markets today.
“The fact is, broadband video is a way for some carriers to fill holes relative to larger closed-network operators such as cable MSOs, and we think over time more satellite, telco and European terrestrial operators will utilize broadband video delivery as a component of their overall offering,” explained Wolf.
2Wire, an integrated broadband solutions provider, recently came out with a broadband video delivery set-top box designed specifically for carriers. Some say this is a sign that hardware manufacturers are also seeing an opportunity to grow in this market. At the same time, cable operators like Comcast, are looking for ways to bring broadband video to the PC as a way to fight potential growing interest in free ad-supported video delivery from portals.
Comcast’s (News - Alert) early interest in being a Hulu syndication partner with its Fancast portal shows how MSOs are also interested in utilizing online video,” said Wolf. “While some MSOs will ultimately take a defensive stance using bandwidth caps or other measures, some also see a threat in offering nothing to their own customers in a world where free, ad-supported prime-time content is available to consumers via their PCs.”
ABI Research’s new study, “Over-the-Top Internet Video Strategies for Carriers”, highlights the various strategies carriers can following order to capitalize on the wave of broadband video services, thus turning a threat into an opportunity.

Other market opportunities lie in video rental, download to own and subscription models, which will all gain momentum as new services bringing online video to the television set begin to flourish, said ABI Research.

However, the largest amount of downloads will be through rental, in particular for online movie rentals, added the research firm. Overall online pay video streams for over-the-top video downloads will grow from 215 million in 2008 to more than 2.4 billion in 2012, with rentals accounting for about half.

Michelle Robart is a contributing editor for TMCnet. To read more of Michelle's articles, please visit her columnist page.

Edited by Michelle Robart