2017 summary: OTT has finally become mainstream for pay TV operators

January 17, 2018 1:42 pm

It is a great time to be in streaming business. What have we learned and what is coming in the near future of OTT. 

Inna Zagrebelny,

Product Marketing Manager, Giraffic

verge-2015-10-26_14-04-59.02017 was marked as the year of Over-the-Top (OTT) emergence, including multiple launches of new streaming services, Youtube and Hulu entering the linear TV streaming market, Disney’s acquisition of BamTech and announcements of multiple standalone direct to consumer streaming initiatives and DirecTV Now reaching the 1 million subs milestone. And don’t forget the news about T-Mobile’s acquisition of Layer3, marking the well-anticipated carrier’s entrance to the internet TV as the grand finale of the year. Also, with Comcast’s announcement of Xfinity Instant TV and Verizon reportedly testing new OTT service, aimed to compete with the likes of Netflix and Amazon, we think that the best is yet to come and the upcoming 2018 will continue the momentum and bring further disruption of the traditional pay-TV industry and in particular of the video streaming space.  Analysts talk about millions of subscribers dropping their traditional pay-TV bundles, some even say as many as 10 million US cable subscribers are expected to cut the cord in 2018 alone.

While the price and efficiency advantages of the OTT-TV alternative are clear, it’s the differentiation point that remains key to success in this relatively crowded market. It is obvious why users are migrating to streaming but it is less then obvious to find the right solution to prevent migration from one streaming service to another in this “no-contract” land. Unlike linear-TV streaming service providers, the content library is definitely the biggest differentiator for SVOD services like Netflix and Amazon, however the quality of the service and the user experience remains in the cenAVA TV SDK Bannerter of every streaming service success. CES 2018 was just in time for the launch of our TV SDK- the new acceleration solution that boosts the performance of TV appsPerformance gains of up to 50% in quality and 75% reduction in buffering can be obtained by simply integrating AVA TV SDK into video streaming app, enabling OTT providers to deliver the great experience their subscribers are expecting and paying for.  We must admit the new AVA TV SDK gained a lot of interest among the streaming community with some of the most prominent service providers (that we still cannot disclose) moving on to trails.

Speaking of CES trends, Artificial Intelligence (AI) and smart assistants seemed to be included in almost all the new products that were announced during the show and the video space was no different. Samsung is using AI to bridge the gap between the lack of 8K content in the market and their new 8K screens- the implementation of their proprietary algorithm will upscale the existing lower resolution content, regardless of its source, into supreme 8K resolution. LG will make our smart TVs even smarter, by adding intelligent assistance to their TV sets that will learn our usage and consumption habits to essentially adapt the device settings to our needs. The  to their X1 and xFi platform while it is clear that it’s just a matter of time until those will be extended for entertainment and content consumption purposes; and of course the preview of the first sound bar with voice assistant- the TCL Roku Smart Soundbar, that features the new Roku assistant. The innovation however is not in AI or voice assistants, that some of us already getting used to, rather in how those innovations aimed to change the way people experience entertainment and consume content in their living rooms.

At CES the TV sets have their own sweet spot, with all the manufacturers showcasing their premium screens. Those TVs are definitely eye-candies, but despite further OLED and HDR implementations, 4K and 8K resolution and overwhelmingly large screens, they seemed to be more or less of the same as last year.

2018 is shaping to be a year of massive changes in adoption of streaming-based pay TV services. It will be interesting to see how the industry will continue to evolve at and how the new technologies penetration will transform the way we consume and experience video. As accurately summarized by Roku CEO, Anthony Wood: “It is a great time to be in the streaming business.