[Satellite News 03-01-11] About 42 percent of the 37 million IP-enabled, hybrid set-top boxes shipped worldwide in 2010 were satellite-enabled, according to a Feb. 28 report from IMS Research.
    The study, “On-Demand Services Business Models: Video, Games and Over-the-Top (OTT) — 2011 edition,” included predictions that OTT broadcasting would be seen as one of the next big trends in television, placing the onus on satellite players to enrich their content offering using other delivery methods as customers demand more flexibility in how they access content, IMS Analyst Paul Erickson told Satellite News.
    “OTT is a potential opportunity to deliver VOD (video on demand) and other services that the satellite operator cannot currently deliver and thus potentially enables stronger retention, additional revenue streams and greater competitiveness. On-demand services from pay-TV operators are becoming more robust each year with more free content and integration of OTT services,” Erickson said.
     IMS projects that in 2011, 72 percent of VOD requests via pay-TV platforms will be free transactions, and that OTT content delivered via set-top boxes will account for a fair share of free transactions. The OTT market is forecasted to generate $48 million in pay-TV operator revenues this year, according to Erickson, with revenue totals expected to grow to $436 million by 2016.
    “It is in the satellite operators’ competitive interest to embrace the use of a broadband connection in the long-term, not only for VOD and connected services such as remote scheduling and streaming playback but also for incorporating various sources of non-cannibalistic OTT video within their user experience,” Erickson said.
    The mobile market also has seen numerous studies forecasting massive growth in the consumption of OTT video services, with predictions that mobile video will account for up to two-thirds of mobile handheld data use by 2015. At the same time, over-the-top TV delivery services such as Hulu, Netflix and YouTube also are showing strong growth in subscribers. IP-based viewing options have yet to pose a major threat to traditional satellite video consumption, it is forcing content producers to make sure their products are more widely available.
    “Consider that for the broadband infrastructure to be in place for OTT video to be available, there are usually either cable operators or telcos behind those broadband services. Typically, both either currently are or will be at some point competing against satellite in pay-TV services. There are the various OTT services available over the Internet,” Erickson said.
    While IMS sees OTT television is the next big thing in broadcasting, Erickson warned that, collectively, the OTT market still has too many unsettled variables to completely displace current methods for real-time delivery. “Currently, the OTT market is constrained to households with broadband. It works well as an alternative or complementary delivery method in other use cases, especially for catch-up TV. However, OTT is perfectly suited for on-demand usage, and I believe that is where the revenue potential lies, whether it is for sports, movies, or other high-value content,” he said.