Earlier this morning I wrote an entry on my company's blog related to "over-the-top" video content and I thought it would be useful to share as my first posting in my own blog as it has been on my mind lately.
One interesting debate I have been following recently is whether consumers will choose to download videos using their service provider's video-on-demand service or whether they will choose to download or stream videos from third parties, i.e., iTunes. Generally speaking, this last option is often referred to as “over the top" because the service runs over the top of an existing broadband service and it not controlled by the service provider.
The real question I see service providers struggling with are whether consumers would be willing pay for the quality of service that comes with downloading video content from the service provider -- this could be their value add. "Over the top" service providers believe they can offer a cheaper solution or better service, since they do not have to worry about providing the network and access. To take this a step further are companies like Sony, whose TVs will support direct internet connectivity, granting access to Sony's online store of movies and TV shows.
So will service providers have to go head-to-head with the consumer electronics giants such as Sony and Microsoft (Xbox live) in addition to “over-the-top" providers such as Amazon and Apple? One model of cooperation is the iPlayer channel offered by Virgin Media in the UK. Virgin Media is the major cable MSO in the UK and now offers a dedicated iPlayer channel enabling customers to watch all the BBC content available on iPlayer with the quality of a video-on-demand service and without impacting the customer's broadband Internet bandwidth. Time will tell whether this model of cooperation spreads.
It is my personal belief that "over-the-top" service providers may eventually win out. They usually have maximum flexibility in terms of technologies, business models and the ability to adapt offerings quickly. They also are not usually reliant on old processes and procedures and can offer new things quickly. Not the least of which they can offer their services fairly cheaply, cheaply enough that we, as consumers and enterprises, seems willing to pay for them.
What do you think?
IMO, I believe that it's a better design in software and business to have a "Service Fascade" where the interface is simplified and the backend implementation is perhaps an aggregation of other video services. Take my 12 year old who just purchased an iTouch. She now has an Apple iTunes account that she can use to purchase video, music, games, etc. She'll buy videos through iTunes because its convenient, easy and reasonably priced. Assuming there are millions of others with iTunes accounts and devices that can play the video - the "over the top" provider is king.
ReplyDeleteWho wins will depend on three things: ease, catalog, and habit. It has to be comfortable for someone to use and figure out. There has to be a decent catalog and ultimately if people use it enough to form habits around it, it sticks and habits are hard to break.
ReplyDeleteI'm on the verge of ditching my Comcast DVR. The only reason I tolerate it has been on-demand since CableCards don't go two ways. My wife has broken the On-Demand habit and replaced it with the "Apple TV." If I put a TiVo in, I add NetFlix streaming. That gives more than enough content (some pay per watch and some "free in the fee").
I've decided I'm all about "Over the Top." I'd love to watch more, even "live" events like out of area sports. MLB on Boxee on AppleTV has given me a taste, and I like it.
I agree that over the top will be king. I just question how that becomes monetized, i.e., how does one make serious money from that? Twitter and YouTube, examples of extremely popular over the top content, haven't quite solved that problem yet.
ReplyDeleteI suppose one answer is folks like joransen who wants to watch more live events. How much are you truly willing to pay for that for each content category?
So far, the answer in general hasn't been a lot.