Is Over-the-Top Content Redefining TV?

It’s affectionately referred to as the “Netflix effect,” and the success of the iPad has turned it into a monster. “Over-the-top” (OTT) content is rapidly emerging as a primary method of choice for viewers consuming premium video.

As networks and video providers try to find the best ways of monetizing this shift, it’s clear that more and more viewers are tossing away their TV Guides in favor of their DVRs and watching their favorite shows on their time.

“These days, it’s absolutely critical to have your video content available across the whole gamut of devices, because consumers want to consume on these screens,” said Sam Blackman, CEO of Elemental Technologies, at last week’s Content & Communications World summit in New York City. “This is a disruptive time in the video space, but there’s a lot of opportunity for folks that get ahead of the curve and take advantage of it.”

Being Where the Viewers Are
According to Blackman, 100 million U.S. consumers view premium broadband video in their home in 2011, but only about 10 million viewers consume broadband video on their mobile device. However, he noted, analysts predict that, by as soon as 2015, that number will skyrocket, with 180 million U.S. consumers viewing broadband video in their home and 80 million viewing video on such devices as phones or tablets.

“In the very near future,” said Blackman, “we think everyone is going to have a tablet device and every member of the household will be consuming a good percentage of the video in the household on the tablet and that will potentially be the main device for video consumption.”

Although it would seem that premium-video providers would want to be available on every device the market offers, that’s not necessarily the case.

“At the end of the day, you want to be on every device, but, practically, you can only be on every device that has some significant market penetration,” said Bob Zitter, EVP of technology/CTO at HBO, during CCW. “There is a lot of work and cost in terms of creating something for each of these devices.”

So video providers do their best to be available on as many devices as possible but only on those that offer a significant financial return in audience and advertising dollars.

“TV Everywhere, by and large, is the effort by advertising-supported networks to be able to continue to reach viewers and to sell ads,” said Zitter, “because that’s what this business is about, wherever the viewers are. As viewers may be accessing programming through Internet devices, the ad-supported networks need a way of following them.”

Zitter, whose company’s mobile service — HBO Go — has become wildly popular,  added that, in order to be successful, OTT-content creators need both authentication protocol and audience measurement, because, “if they can’t measure who is watching an ad, regardless of the device, then it doesn’t matter.”

Many Shapes and Sizes
Although OTT viewing is exceptionally convenient for the viewer, it is significantly more difficult for video providers to encode and transmit their product to the wide array of various devices.

“Delivering and creating video for the Internet is more expensive that doing traditional television,” said Zitter. “To create traditional television, there are two standards: PAL/NTSC, hi-def/standard-def, and that’s it. There is no standardization with respect to what to do [with the Internet].”

For networks looking to get their premium content onto the premier mobile devices, companies like Elemental Technologies help streamline the process.

For example, Comcast’s Xfinity service offers on-demand content on TVs, PCs, phones, and tablets. However, prior to working with Elemental, Comcast’s delivery system required having cables going into every subscriber’s home with additional cables connecting the devices.

The solution is not as simple, though, as just switching to a wireless network: customers’ services range from 3G to 4G to WiFi and beyond. Video providers never know how much bandwidth a consumer is going to have at a given time. To combat this issue, Elemental uses a method called “adaptive-bitrate creation.”

“We create many different streams at different resolutions and different bitrates,” said Blackman. “Then, after delivering [the content] over their network, their service will switch between these different screens based on how much bandwidth and how much processing power is available.”

In the case of HBO Go, Elemental works with Massachusetts-based Azuki Systems, which has a media-platform formatting system that manages Elemental’s transcoding gear.

Azuki systems deliver video files to Elemental servers and inform them how the different profiles are to be created. The files are delivered then to a Level 3 CDN, which is where a mobile device gets the HBO Go application and video, and the device can play it back. The input to Elemental’s system in this case is a sub-mezzanine source content, which is about a 10-Gbps MPEG-4 file. Then Elemental does a faster than real-time transcoding, creating all the HLS/H.264 files delivered to any type of device that supports HLS.

Success in Sports
Although sports does not lend itself to the OTT field in the same way scripted dramas and sitcoms do, the industry has best utilized the OTT media space by allowing access to live games via mobile devices. MLB.com’s out-of-market season-subscription service MLB.TV can be seen on selected devices via its purchase app, MLB At Bat. Even the NFL allows live streaming of marquee regular-season games on NBC, ESPN, and NFL Network through its NFL Mobile app.

NBC Sports Group and MLB Advanced Media also use live streaming video to enhance the television product. During Sunday Night Football and NHL Game of the Week broadcasts, NBC offers unique or dedicated camera angles that viewers can access on their tablet or PC while watching the primary broadcast on their TV. MLB did something very similar this month with its Postseason.TV subscription service.

“Multiscreen is the future,” said Blackman. “People are going to want to consume video across these multiple streaming devices.”