Priming the OTT market

OTT in the Middle East offers a unique opportunity for broadcasters, who need to understand that a modular approach to these solutions is the way forward

Not so long ago, we all consumed video in much the same way – via linear broadcasts delivered over the air or by a cable or satellite provider, at a scheduled time to the TV sets in our living rooms. Of course, that traditional model of video distribution is well-established, but younger generations are now growing up in a connected world in which they can constantly access video on their own terms. They expect to view their content in real time and on demand, and also anywhere they command — on computer screens and smart TVs, on smartphones and tablets, and even on gaming consoles.

As consumers have become addicted to over the top (OTT) video delivery on the device or screen of their choice, broadcasters and operators in the Middle East and elsewhere are taking a hard look at their relationship with viewers. Whereas this relationship was once dictated by scheduled content and pre-programmed channels, broadcasters are realising that viewers are now in the driver’s seat. The shift from channels to content have transformed end users into channel managers, and we see a shift from linear consumption habits towards a time-shifted way of watching TV.

For broadcasters, this means bringing the content to the viewers, on the platform they prefer, at any given time. In order to compete with rapidly expanding, pure online media brands such as Netflix and HBO GO, it´s time for traditional broadcasters to focus more on content and how the content flows through the organisation for delivery to consumers anywhere, anytime, and to any device.

A market primed for OTT

Although the Middle East is a vast and varied region, some common trends are shaping OTT adoption in many Middle Eastern cultures. By and large, OTT acceptance has not been as widespread as in Europe and North America, but momentum for OTT is beginning to build as consumers become more familiar with online content and the infrastructure continues to improve. As mobile networks mature and devices become more widely available, these users will begin to demand a broader range of content on the platform of their choice.

Several other factors are driving the emerging OTT marketplace in the Middle East. Because a smaller percentage of women work outside their homes in most countries, the number of hours spent watching television is disproportionately large compared to Europe and North America. Also, some Middle Eastern countries have seen an influx of immigrants in recent years from neighbouring countries. Conversely, the Middle East is the motherland of one of the biggest expatriate societies in the West. All of these expatriates crave content dubbed in their own language and cultural programming from their homelands.

Since the majority of the television infrastructure in the Middle East is funded by the government, broadcasting companies recognise the advantages (and revenue potential) of offering multi-language and multi-cultural content – but they balk at the high price of satellite delivery for a small ethnic channel. Also, these companies produce a large body of their own content, such as news and entertainment programmes, and many of them are already spending millions of dollars on satellite distribution in international markets. While satellite uplinks can’t be avoided for every situation, they can be replaced by OTT in many scenarios. Making content available on connected devices is an excellent strategy for keeping viewership high in expat communities.

In another important trend, the availability of national news channels in content hubs such as Livestream has given Middle Eastern broadcasters access to a vast audience and enabled them to curb piracy. The good news is that many national channels funded by the government are now becoming available to both expats and homeland natives.

As a side note, the political unrest that has developed as a result of the “Arab Spring” has driven a dramatic change in users’ behaviour, as larger numbers now go online to search for videos that can provide them with different angles on the events. As proof, by some estimates, YouTube receives more than 300 million hits daily from the Middle East. Today, in the absence of well-organised OTT services that host content for content owners, these viewers are turning to online video sites such as YouTube.

All of this translates into a tremendous OTT opportunity for both government and private broadcasters and content providers, especially since large online brands such as Netflix and HBO GO have not yet established a strong presence in the Middle East.

Norway’s TV2: an OTT pioneer

With the window of OTT opportunity wide open in the Middle East, broadcasters and content providers have plenty to gain by integrating OTT delivery into their traditional DTT workflows. With the explosion of online content, consumers are faced with more viewing choices than ever before. Therefore, it’s critical that broadcasters establish a strong online brand as an extension of their current business, in order to preserve their relationship with viewers and maximise the new revenue streams that will result. This can be their strongest weapon against growing competition from global brands such as Netflix and HBO GO.

Although Norway is a fair distance from the Middle East, both geographically and culturally, there are still some strong lessons to be learned from one broadcaster’s experience. TV2 is Norway’s largest commercial television station and has always been on the leading edge of online television. It began streaming live news in 1997, launched its interactive division in 2000, launched the region’s first full-blown OTT Web TV service in 2002, and began streaming in HD in 2009. The Web TV service, TV 2 Sumo, gave TV 2 a new way to monetise its content and has since become Scandinavia’s largest commercial online video enterprise. Beyond that, TV 2 Sumo prompted others in the region to jump into the OTT waters, giving rise to a rich market for online TV in the Nordics.

Through Sumo, TV 2 wanted to offer its customers the ability to choose from a comprehensive library of TV 2 programming, which they could view online, live or on demand, using their platform of choice. Such a service required a content management and delivery platform that would enable TV 2 not only to offer the most relevant content to its viewers, but also to do so in a user-friendly, inviting environment with an easy, flexible payment system. Just as important, the platform would need to deliver HD and SD content with a high level of technical quality to any screen. The problem was, no such platform existed that could satisfy all of those requirements, so TV 2 decided to create its own.

A powerful, custom-built OTT platform

Armed with a distinct vision and a first-hand understanding of the challenges associated with multi-format streaming, the minds at TV 2 developed the technology behind Sumo, an award-winning, subscriber-based Web TV service for monetising live and on-demand content online and delivering it to multiple screens. Through Sumo, customers could view their choice of content, whenever and wherever they wanted it and on a range of devices – and TV 2 could build direct relationships and loyalty with its customers while monetising its significant library of content and content rights.

A modular approach to OTT success

Although almost 360,000 people now subscribe to Netflix in Norway, other brands such as TV2 Sumo and NRK are continuing to grow. It’s a powerful indication of a market whose potential has barely been tapped.

Each service is unique, and each market and customer requires a bespoke approach. This is especially true in the Middle East, where every country has its own distinct culture, infrastructure, and viewership profile. The future of OTT is modular, because broadcasters are looking for a blend of “build” and “buy” components to structure OTT services that will evolve and scale as the means of media production and distribution continue to be reinvented. A modular platform for OTT and open APIs offers an end-to-end solution, but also enables the broadcaster to choose the components needed now, and then add others later as the OTT business grows.

The way forward is creating a modular structure of a platform that offers an end-to end solution, but at the same time enables the broadcasters to choose the parts they need now and adding others later. In an area as diverse as the Middle East, such a modular approach can be a broadcaster’s best strategy for delivering OTT as an extension of the existing DTT business, extending its customer relationship, and embracing the future of TV.

 

Melika Golkaram is Pre-Sales Engineer a

Vimond Media Solutions.