Is OTT good economics?#dvbw13


Tom Morrod from Screen Digest offered a perspective on the ‘true cost of OTT’.    

 OTT has allowed a number of ‘new entrants’ in the ‘premium content’ business to enter the market, such as Hulu, Netflix, etc.   He pointed out that consumer spending on TV (rather than going to the cinema or games) is the fastest growing part of the industry.  Current Pay TV operators are also trying to enter the market for multiple devices.   Everyone is ‘trying to do the same thing’ – serve multiple devices.

 One of the key elements of costs is the provision of CDNs.   The costs per stream for CDNs are low per viewer, but the cost mounts with the number of viewers.  Tom reckoned that the costs of HDTV via CDNs are more expensive than broadcast with more than about 5000 viewers.     “There is no economic sense in delivering channels with large audiences via unicast”.    The situation can be reversed for SD channels with very small audiences.  The most efficient approach would be a mix of broadcast and OTT depending on audience size.    Wifi may have an important usage too.  

But will what is most efficient necessarily be what happens? 


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