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Cable Technology Feature Article

September 11, 2014

An OTT Outlook: Entering a Big Fourth Quarter

By Bob Wallace, Founder, Fast Forward Thinking LLC

As the TV industry quickly approaches the fourth calendar quarter of 2014, content questions remain –and strategies appear clearer - for over-the-top (OTT) service providers and wannabes such as Sony and Dish Networks, both of whom are expected to launch their offering by year end.

Silence on the content front has industry watchers wondering of its content lineup will contain channels other than those it received carriage rights for in early March as a result of its Hopper DVR dispute settlement with ABC Disney (News - Alert).

The deal excited sports fans, as Dish landed the rights to numerous ESPN channels and supplement its family programming with such popular regional sports programming as the SEC (News - Alert) Network and the Longhorn Network, which features sports contests from the University of Texas.

Sony Taps Viacom

Sony, which began talking about a “virtual pay-TV service” way back in January at the 2014 Consumer Electronics Show, announced a huge content deal with media conglomerate Viacom (News - Alert), Inc. spanning 25 channels adding the Comedy Channel, MTV channels, Spike, Nickelodeon channels and more to Sony’s own movie assets.

But, while some are comparing the two on competitors, Dish’s OTT offering is far different from Sony’s planned offering so far because of its inclusion of live sports programming and sports news where it appears Sony has none, at least for now.

OTT subscription service king Netflix has kept its price low and its customer base large in part by providing a no-sports alternative to pay cable TV subscriptions continually driven up and with added fees as operators struggle mightily to manage rising costs for live sports content.

TV Everywhere & Sports

Because it’s the most coveted live content, and among the most coveted programming overall, operators hope adding it to their TV Everywhere (TVE) content strategies will help keep subscribers put. With that in mind, Fox Network late last week announced it will live stream over 90 of its NFL regular season and playoff games accessible from Fox Sports Go, an app similar to that of TVE supporters HBO and ESPN.

The biggest catch is that the games can’t be watched on mobile devices because of the NFL’s exclusive deal with Verizon Wireless (News - Alert) and its NFL Mobile app. So it’s laptop and PCs until further notice.

Whether Dish  can find a way to add live NFL games to its promised OTT service remains to be seen, but would serve as a cherry on top for an offering with a heavy dose of college football gamecasts. The satellite service provider could add another regional sports network but it risks boosting the eventually monthly price for its OTT service.

Broadband Vision

A recent study from Leichtman Research supporting the spread of OTT service claimed that the number of broadband households exceeded for the first time the number of traditional pay-TV subscription services in the second quarter of this year. This is not a complete surprise as later TV industry service entrants AT&T (News - Alert) with u-Verse and Verizon with FiOS have been reporting greater increases in broadband additions than TV subscribers.

A broader look at OTT adoption reveals that North America will not be close to leading the world in OTT homes according to new research from Digital TV Research. The company predicts the number will increase by almost 100 percent by 2020 from roughly 374 million homes by yearend to about 706 million at the end of stretch.

The biggest growth will come from the Asia-Pacific region, with North America’s share expected to fall from 57 percent in 2014 to 34 percent in 2020, according to the Leichtman Research study.

The Bottom Line

While the year to date has been packed with plans for OTT offerings and accompanying content deals and punctuated by emerging trends in usage here and abroad, the best is yet to come in the fourth quarter. That’s when anxiously awaited service details – such as pricing - from the likes of DISH and Sony come into focus in a market driven by sustained strong growth in broadband subscribers.

Stay tuned.

Edited by Maurice Nagle

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