A year for the next step in OTT evolution

Brenton Ough, CEO & Co-Founder, Touchstream

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Diving into 2021 here are some predictions for the next chapter of the OTT market. Although moving on from last year is very appealing I can’t help but foresee that much of 2021 will mirror 2020.

Driven by the ongoing growth the OTT market is experiencing, cloud based solutions and log analytics are going to be in high demand during the year, particularly as more niche players join the space. The need is and will be driven by the high stress on the internet of 2020 that will repeat again this year as governments continue to force mobility limitations on populations across the globe. These key tools are now the go-to platforms video operators want to use as they can’t be monitoring and analysing data from their network operation center (NOC). These solutions have proved their worth during the first wave of Covid for early adopters and now more operators will jump into them to guarantee their service delivers on the QoS expected by viewers.

Telcos are also now realising the importance of joining OTT services in the form of bundled or independent services. This is because cord cutting reached a critical high last year - US subscribers had their biggest drop yet, -7.5%, with many viewers cancelling services when live events such as sports, were put on hold, with few renewing even as live events returned. Ultimately this has promoted a more marked transition from Pay TV to OTT. eMarketer predicts fewer than half of US households will subscribe to Pay TV service by the end of 2024.

Although telcos and cable TV face potential pressures, there is certainly room for opportunity. In fact, connected televisions are reclaiming their space as the number one go-to device in the home as the need to stay home remains. The UK’s O2 is already taking advantage of this with offers including 6 months of Disney+ and Apple TV+ rolled into a mobile phone tariff. We will see spending on video streaming rise as households opt for a bundling of premium SVOD, specialised SVOD and AVOD services.

On another note, premium VOD is a growing market, with 22% of the US streaming customers paying to watch direct-to-service movies as of 2020 due to the closure of cinemas. Widespread premium VOD services are more likely to become a competitor, rather than a replacement, to the cinematic experience, HBO Max and Disney + are the best examples of this phenomenon with the promotion and release of Wonder Woman 1984 and Mulan exclusive to their platforms and cinemas that remain open.

2021 will definitely force the industry to raise the quality standard at which content is offered. VOD challenges have been overcome this year and the big focus is now on live content. We have already started to see this phenomenon in 2020 with the race over who secures live sports rights. It’s not a race where only telcos and exclusive channels take part in anymore. OTTs have joined the competition and they are here to stay. Fans that can’t attend live games at stadiums or bars have now become more demanding than ever before with live streamed content, and being able to offer the right content to them at the best quality possible is the key to success.



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