Technology | Media | Telecommunications

Friday, January 08, 2010

Mainstream Platforms Enable OTT Adoption

According to the latest market study by The Diffusion Group (TDG), by 2014 more than 360 million households worldwide will be enabled for Over-the-Top (OTT) video services on their TV set -- with more than half actively adopting OTT services.

"A key reason why many OTT efforts have failed (and will continue to do so) is their dependence on proprietary single-function hardware paid for by consumers," notes Colin Dixon, managing partner at TDG.

"In order to grow a profitable base of service users, OTT operators must either give the hardware away for little to nothing or leverage other Internet-enabled platforms as a conduit."

TDG believes that the latter approach is preferable, yet its success hinges on the rate at which these Internet-enabled mainstream platforms multiply. Clearly, that's a factor OTT providers can't easily predict or control.

Dixon notes that a number of companies -- including Netflix and the BBC -- have been embedding their service software in a variety of retail video platforms and are enjoying some early success.

As normal replacement cycles unfold over the next five years, and as CE manufacturers accelerate their shift to embedded solutions, the number of households with at least one Internet-enabled living room video platform will grow rapidly.

Once again, TDG forecasts the number of broadband-enabled TV households -- those with the basic infrastructure to enjoy OTT video services -- will grow from 130 million in 2009 to more than 360 million in 2014.

The number of active OTT households -- those that put this IP Video infrastructure to use -- will grow from 40 million in 2009 to 170 million in 2014.

TDG's latest digital media analysis, "Broadband-Enabled TV: Evolution of OTT Hardware Platforms" is the second in a two-part report series by Colin Dixon on the emerging opportunities associated with Over-the-Top video services.