To fight OTT, traditional cable firms explore digital space
With rapid growth in digital space, traditional cable operators are realising the importance of providing OTT content
Arecent report by India Ratings and Research shows that traditional cable companies are exploring new ways to offer over- the- top ( OTT) content broadcasting, citing rapid growth of independent OTT service providers in India.
OTT broadcasting is the delivery of audio, video, and other media over the Internet, without the need of a traditional cable subscription from MultipleSystem Operators ( MSOs) who have control over content distribution.
Indian Ratings and Research said: "Traditional cable companies are joining the OTT bandwagon by launching their own OTT ( over the top) platforms to cash in on the buzz in the digital space.”
One key reason for this drift, as cited by the Telecom Regulatory Authority of India ( TRAI), is the large number of wireless telecom subscribers. The Cellular Operators Association of India ( COAI) also explained Internet penetration has been increasing rapidly in the country; 3G users in India are expected to double ( to 330 million) whereas 4G users have been pegged to grow ten- fold ( to 42 million) by 2017.
With such rapid growth in the digital space, independent OTT players have made their presence felt in the country, and have clearly impacted the businesses of traditional cable companies. This has forced conventional cable operators to look at ways to offer online demand- based content.
RISE OF INDEPENDENT OTT PLAYERS
A 2016 Frost and Sullivan market insight report on the Indian OTT market indicated that there are about 66 million unique connected video viewers in the country every month, and roughly 1.3 million paid video subscribers.
OTT services in India have surged over the past year after the entry of popular online content providers such as Netflix, Eros Now, Yupp TV, and others. As a result, cable broadcasters such as Ditto TV, Hot Star, Voot have now been forced to start their own OTT services. Another reason why traditional cable companies are setting up their own OTT services is the industry- wide shift of consumers towards digital content.
Asianet Satellite Communications became the first MSO to launch OTT broadcasting services in various regional languages.
Hathway Cable and Datacom is expected to launch its OTT services soon. India Rating and Research also expects other MSOs to follow the OTT trend, in order to cope with this shift in consumption pattern.
Though it is tough to compete against popular OTT video streaming services, India Rating and Research senior analyst Amit Mital feels the main strategy for these MSOs is to grab attention of subscribers initially through lucrative offers and monetise it later.
RISING INTERNET ACCESS
The Internet penetration rate in the country is improving rapidly, leading to higher availability of online services. Mital said faster Internet in the country would compel most traditional cable service providers to delve into the OTT space.
“The next leap forward for the industry will be post the introduction of better 4G data services by telecommunication service providers which will enable wireless and on- the- go streaming,” he said.
Another problem for traditional MSOs is that of reaching consumers directly. There are a number of occasions where there is discrepancy in content distribution through local operators and MSOs tend to lose out. With OTT adaptation in the country, broadbandenabled cable operators will be able to reach the consumer directly.
“The rush to encash on the digital frenzy is pushing MSOs to experiment, but the consumer is likely to choose the OTT provider based on the availability of a variety of content, enduser experience and price point,” said Mital.