Abstract
Hundreds of millions of consumers around the world are increasingly accessing
video content over the public Internet, reaching beyond the walled-garden
services offered by their pay-TV providers. This over-the-top (OTT) video
offers consumers on-demand access and a broader selection of content than pay
TV, and has no monthly subscription fee associated with it. Increased
broadband penetration, improved video compression techniques, and faster
average connection speeds have also greatly improved the user experience over
the past few years.
In a Heavy Reading study of U.S. consumers conducted in October 2009, nearly
40 percent of respondents said they watched more online video in 2009 compared
with the previous year - a substantial year-over-year percentage increase.
Video is now responsible for the majority of Internet traffic, as users are
moving beyond viewing short, low-quality clips of user-generated content on
YouTube and increasingly seeking out TV shows, films, and other professionally
created, high-quality video content on the Internet. Video quality and
resolution are also improving steadily, and HD video is now being offered. As
these high-bitrate streams use up an increasing amount of bandwidth, service
providers face a much greater challenge in managing their networks than that
posed by P2P traffic in the past.
Service providers do not benefit from the popularity of online video: It is
called "over-the-top" because it can be delivered without their involvement.
However, this video content does travel over their networks, and its
high-bandwidth, low-latency requirements, coupled with widespread usage, are
causing significant problems for service providers. Broadband pipes are
getting clogged, and service providers are having to develop new ways to
manage the challenges posed by broadband video traffic.
This problem is not going to go away: Even as service providers struggle to
manage video traffic on their networks today, it is projected to increase
exponentially over the next five years. Network operators will have to
identify ways to either manage this traffic, or monetize it so that they can
pay for continual network upgrades.
Report Scope and Structure
OTT Video: Service Providers Face A Gathering Storm is structured as follows:
Section I includes a full executive summary and report key findings.
Section II examines the rapid growth of online video and explores the
primary forces driving its growth. It looks at the growth of Internet
advertising and the ability for online video sites to monetize their business.
It also compares the current impact and prospects of IPTV and OTT video for
service providers, and discusses the relative importance of each approach.
Section III reviews the impact of video on service provider networks
and the expectations of its growth. It includes a discussion of growth
expectations and the shift from P2P to HTTP traffic and its implications. It
analyzes the primary problem areas for service providers and includes a
service provider case study.
Section IV explores potential solutions for managing traffic and
developing revenue-generating models for service providers, evaluating the
strengths and weaknesses of different approaches. This section also provides a
snapshot of the regulatory picture and a list of recommendations for service
providers.
Section V provides a guide to the structure of the industry and
assesses the role and capabilities of selected players in this space. It also
analyzes selected vendors in each industry segment, 24 in all, appraising
their relative market strengths and weaknesses.
The report is essential reading for a wide range of industry participants,
including the following:
- Telecom service providers: How will the popularity of OTT video
impact your network and business model going forward? What techniques or
strategies can you employ to mitigate the effect of this traffic on your
networks? How can you balance your customers' desire for high-speed
connections supporting HD video with the difficulty of monetizing this
increased usage? Which technology suppliers are in the best position to help
you both manage and monetize Internet video?
- Telecom equipment vendors: How do your products and solutions stack
up against those of your competitors in the network management arena? Is your
current and anticipated product portfolio in line with service providers'
needs in dealing with OTT video? Which technologies are service providers most
interested in for managing bandwidth and optimizing the end-user video
experience?
- Media content owners: What new technologies and content
distribution models are service providers exploring to deal with OTT video?
Which media players and/or video compression formats present the best option
for distributing your content online? What business models are most likely to
govern service providers' relationships with content providers going forward?
- Investors: How will the evolving regulatory picture influence the
delivery of online video and shape service providers' future business models?
Which technology providers are likely to emerge as leading suppliers of
solutions to help manage online video? How will new approaches to monetizing
online video - such as revenue sharing, micropayments, and embedded
advertising - influence winners and losers in this growing marketplace?
Table of Contents
LIST OF FIGURES
I. INTRODUCTION & KEY FINDINGS
- 1.1 Key Findings
- 1.2 Report Scope & Structure
II. OTT VIDEO OVERVIEW: WE' RE JUST GETTING STARTED
- 2.1 Drivers
- 2.2 Revenue: Can Online Video Pay Its Bills?
- 2.3 Online Video & Pay TV: Competitive, Complementary, or Unrelated?
III. FULL PIPES: THE PROBLEM FOR SERVICE PROVIDERS
- 3.1 Impact of Video
- 3.2 Key Problem Areas
- 3.3 Provider Spotlight: The Verizon View
IV. COPING STRATEGIES: TO MANAGE OR TO MONETIZE?
- 4.1 Current Initiatives to Manage Network Traffic
- 4.2 The Regulatory Picture
- 4.3 Monetization
V. THE VALUE CHAIN & SELECTED PLAYERS
- 5.1 Video Players
- 5.2 File-Sharing Protocols
- 5.3 Content Delivery Networks
- 5.4 Service Provider/Last-Mile Solutions
APPENDIX A: ABOUT THE AUTHOR
APPENDIX B: LEGAL DISCLAIMER
