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November 2017

OTT VIDEO ON DEMAND AND LIVE TV DEMYSTIFIED


By DHIMANT BHAYANI -
Founder and CEO of iRevo Multimedia


OTT stands for “Over the Top” and refers to Video on Demand and Live TV content that is distributed outside of (“over the top”) managed networks like Cable TV, Satellite TV or Internet TV (IPTV) over LAN. One can infer from the above that OTT means Over the Internet. World over, OTT content distribution has been making progress by leaps and bounds. The greatest benefit of OTT service is to be able to distribute content globally; over the public internet; without having to worrying about building and managing the network (Cable) or up linking to Satellite (DTH). Furthermore, OTT services enables consumers to access the content that is what they want (choice) and when they want (on Demand)!


EMERGENCE OF OTT SERVICES:

Internet Network is an Ever Expanding Data Pipeline; just like oil pipeline carries oil; internet network transports voice, video and data. The Internet Network expands in two dimensions: Distance and Size. Greater and greater distance is covered by fiber, wireless and satellite networks. Size refers to amount of data network carries. This is where the real revolution lies. Unlike oil pipeline once built has a fix capacity, data networks (particularly fiber based) can keep increasing its capacity multifold by changing the data modulation and compression technologies for a small incremental cost. So how do you fill this ever increasing data capacity? Industry leaders like Cisco has been heavily promoting sending as much video data as possible over IP network with global reach. Internet has benefited telecommunications, content and content distribution platforms (OTT companies) like YouTube, Roku and Netflix.


WHY OFFER OTT SERVICES?

With Internet, content becomes distributable globally. This gives consumer options what they can watch when they want to watch (have time) unlike linear TV which broadcasts content on a predetermined schedule and smaller content selection. Furthermore, OTT VoD service can be delivered via mobile or home internet and hence users can watch content at any room or outside the home too. In Western world and developed Asian economies (Korea, Japan, etc.) more and more content is consumed on mobile devices. In Unites States, almost all TV service providers offer TV Everywhere option where user can watch live TV channels on their mobile, tablet or PC; besides watching on TV via Set Top Box. US Broadcasters took this initiative only after learning that if they do not give their content on other network and devices, customer is spending more and more time viewing competitors alternate content and customer is changing his viewing habit. In India, BW is still not as pervasive and affordable but with the launch of Jio, there are far more users on High Speed mobile wireless network than before. Furthermore, there is a rush to by big and small companies to build out fiber infrastructure to provide TRUE BROADBAND (10 MBPS or more with 100GByte or more data). So, ecosystem is rapidly emerging to deliver OTT service cost effectively. Furthermore, many businesses are realizing that in the end, speed and data plan are not differentiable between themselves and competition. This is where it is important to offer OTT VoD and other Value Added Service (VAS) to their customers.


♣ OTT is Video delivery over Internet, Video On Demand or Live Broadcast TV

♣ OTT Services Increases Bandwidth Demand by Users

♣ Offering of OTT Service Helps Build Your Brand and Service Stickiness

♣ A good OTT Service Increases Customer Loyalty, Retention and ARPU

♣ Smaller ISPs and Operators Must provide OTT services to match or lead competitors




WHAT IS AVOD, SVOD, TVOD AND FREEMIUM?

Let us look at some of the OTT service giants like YouTube, Netflix and Hotstar to understand the services they offer and how they make or lose (invest) money.

YouTube: The world’s largest OTT service has built its own Servers, Software and CDN while creating its own content ecosystem via what is called UGC (User Generated Content) and combining the same with traditional entertainment content. Monetization has been primarily via Ad insertion. This type of Ad supported Video on Demand service is called AVOD in short.



YouTube does offer certain movies and p r e m i u m videos on ‘rental basis’ (also referred as Pay Per View) to view on device of your choice; PC, Mobilephone, Tablet or OTT Set Top Box. This type of Transaction (onetime payment) based Video on Demand service is referred to as TVOD.

While YouTube is the largest AVOD service providers, Netflix has become the world’s largest Subscription based Video on Demand (SVOD) service provider with over 100M subscribers globally. India’s most popular OTT service Hotstar falls into a category called Freemium; a word derived from the combination of Free + Premium content.

Hotstar offers a lot of good Free content; with Ads; but also offers certain Premium content like newer Movies; without Ads; via monthly subscription. So Hotstar can be classified to offer both AVOD and SVOD service or as a Freemium service provider.


IS OTT PROFITABLE?

In India, Hotstar, Jio and Ditto are delivering the VOD, Live TV and Catch up TV services. However, none has embraced openly to marketing the same services for viewing on TV via OTT Set Top Box for “obvious” reasons! We believe that ultimately these companies will offer OTT and Live TV services over the Internet for watching on TV and other devices of user’s choice without having to be in their house, next to TV set.

Before one can generate revenues from OTT services, significant investment is required in content acquisition, technology and customer acquisition. Companies like YouTube, Hotstar, Jio, Netflix and others have made huge investments and incurred losses for the first 2 to 5 years of operations. Mature OTT service providers like Netflix and YouTube are generating huge profits from their business while building a long term franchise with customers.

A key cost component is not understood by many smaller ISPs and Cable operators. That is cost of Streaming Server and Software to directly serve smaller number of users (typically under 1,000) or cost of CDN bandwidth required to distribute to larger number of users nationally or globally. Smaller ISPs and MSOs / LMOs should explore turnkey OTT services from companies like Yupp TV and iRevo.


TECHNOLOGIES REQUIRED TO DEPLOY YOUR OWN OTT SERVICES?

Traditional Cable TV service requires Content Source (Satellite TV Signal), Headend as a Platform, Cable Network for distribution and Set Top Box + TV for content consumption using EPG (TV Guide) and Remote control as user interface. OTT services receive content from storage servers and internet streams from Cameras or Satellite to IP headend. This content is transcoded and streamed via streaming servers from datacenters / ‘NOCs’ for small number of users or via origin servers (few streams) feeding in to a Content Delivery Network (CDN). Like IP networks have control plane that carries routing and other information and data plane that carries actual internet traffic, similar mechanism is used for delivering OTT service. An OTT platform is used to organize content types, content placement in App, content Thumbnail and content Metadata, Ratings, etc. which is presented to application running on OTT Set Top Box or Mobile Phone or PC. The OTT platform carries DRM and Content Source URL information for the Video Player to be able to decode a video stream. Video streams coming from a CDN or Streaming Server is a parallel activity and is akin to data plane concept in networking terminology.

It is NOT right to think that one can put together an App with Live TV URLs or an in house streaming server with content to deliver OTT service as such platform will lack scalability, analytics and monetization capabilities.


OTT VOD OR OTT LIVE TV AND VAS?

The MSOs would want to first offer OTT Video on Demand services followed by Live TV over OTT. And ISPs too should start with OTT Video on Demand services. iRevo’s PlayCast OEM is an example of readily customizable OTT Video on Demand service that one can start with minimum investment and none to little technical knowhow. Eventually, both businesses would offer Live TV and Video on Demand over OTT. However, keep in mind that Live TV is already available to customers via existing Cable and DTH businesses. Furthermore, today, it is not clear whether existing licenses with Broadcasters gives them right to transmit those channels over IP network.



However, those who own local TV channels and may have obtained rights to send Live TV over Internet can readily benefit from iRevo Play TV App. To the best of authors knowledge, there is no explicit prohibition or permission when it comes to streaming Free to Air (FTA) channels over internet. Besides Video on Demand and Live TV over OTT, other popular OTT services include Internet Radio and Photos and Videos from Social Media, Stock Quotes, News Headlines, Weather and Horoscope. As first phase of OTT gets underway, next wave will follow with Social TV, Co-Viewing and Custom TV (MyTV) where personalized channels will be streamed to users of OTT service. Really, when you can choose from millions of videos, who would want to remain confined to few hundred channels on Live TV!


WHAT DOES IREVO OFFER FOR OTT VOD & LIVE TV SERVICES?

iRevo makes OTT Platform that does content aggregation, ingestion and curation. Platform supports creating OTT and Live TV service packaging, User and Device registration and management and Ad support and Analytics that is critical for monetization. All these running on Amazon Cloud Platform for over past five years. This Platform as a Service model enables iRevo to offer managed OTT VoD or Live TV OTT services without customer having to invest heavily or deeper technical knowhow.


COMPLETE SOLUTION BY IREVO, READY TO GO:

OTT Platform + Middleware, TV + Mobile Apps, OTT Android box and Multiscreen via TelePlay.

iRevo also provides middleware and OTT Video on Demand + Live TV Apps for OTT Set Top Boxes like iRevo Smart TV Box or Hybrid (Cable + Internet or Satellite + Internet) Set Top Boxes (both Android and Linux). iRevo also provides Live TV and OTT Application for Mobile phones and Tablets. Middleware and Apps interface to iRevo OTT platform for seamless user experience across multiple devices.

At the SCAT 2017 exhibition held in October, iRevo announced availability of its OTT solution that is very attractively priced and besides enabling small MSOs, it is available to LCOs and VNOs to offer it to their customers, along with their Logo and customization option in the local regional language. The iRevo PlayCast OTT package is priced at just ₹ 1,50,000 per year for up to 1,000 subscribers. The product was showcased in Optilink Networks booth and received very warm response.

iRevo is pleased to extend the PlayCast App Launch Offer from the SCAT show to all SCAT Magazine readers. Purchase two iRevo Smart TV Box for ₹ 10,000/++ and get 1,000 PlayCast App license with thirty days validity for free - this is worth ₹ 12,500 - value! Offer will expire on November 30th, 2017.

For more information, contact:

marketing@irevomm.com or ateet@optilinknetwork.com

iRevo PlayCast and PlayTV Apps for ISPs & MSO / LMO Operators.


ABOUT THE AUTHOR:

Mr. Dhimant Bhayani; Founder and CEO of iRevo Multimedia; is a 30+ years veteran of Silicon Valley with experience ranging from an engineer who developed Image Processing Systems that were used in creating animated cartoons like Tom & Jerry to starting and successfully exiting a semiconductor start up that made video chips in mid 90s. He has been an executive officer of a listed company in Silicon Valley and was amongst the handful of second generation entrepreneurs in Silicon Valley. Mr. Bhayani has invested in over 50 companies as an Angel Investor and from a Venture Capital fund he cofounded which generated positive returns for investors.

Mr. Bhayani founded iRevo in Silicon Valley to build applications, middleware and cloud platform software to deliver end to end solution for OTT and Broadcast TV segment. Since 2013, he has been focused on India market and has led iRevo to deliver various products for OTT Video on Demand and Live TV solutions for India market. iRevo products are customized for India B2B players and for consumer's ease of use. iRevo products are used on Set Top Boxes, Smart-phones and Smart TV sets. Mr. Bhayani holds a B.S. in Electronics from SUNY College at Buffalo and M.S. in Computer Engineering from University of Michigan, Ann Arbor.