The widespread availability of broadband internet has opened up new ways of distributing television to consumers. The internet enables pay TV subscribers to access their service on devices other than the main TV. At the same time it allows on demand content to be brought into the home via the set-top box to complement the channels broadcast over traditional networks.
However broadband also allows the launch of TV services distributed purely over the internet. In general these ‘Over-The Top’ or OTT services provide access to libraries of on-demand content, and are funded by either advertising or subscriptions. There are now many hundreds of TV services of this type worldwide and a few are even offering linear TV as well as video-on-demand.
In some cases, people are finding that OTT services are all that they need, or can afford, and are cancelling their pay TV subscription. This ‘cord-cutting’ is particularly prevalent in the U.S. where pay TV prices are highest, and where in the past there has been little in the way of low-cost or free-to-air alternatives.
On the other hand, most people want to watch long form content on a large screen, so OTT also provides an opportunity for pay TV operators to improve the attractiveness of their service by integrating OTT access into the main TV user experience alongside their own broadcast and on demand content.
This dichotomy where OTT is both a threat and an opportunity has meant that OTT is a hot topic for pay TV operators. To help with understanding what is going on we have put together a Market Brief to provide an overview of what the analysts are saying about the state of the market.