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FierceWireless.com Like many consumers, I’m increasingly watching video content on my smartphone and tablet, rather than my TV. And I use multiple services—Hulu, YouTube, Netflix, or and even my cable provider Com- cast’s Xfinity app—to find the video content I want to watch. And I’m not alone. According to Nielsen’s most recent cross-platform report, the amount of time Americans spent watching video via tra- ditional TV rose less than 1 percent year-over-year as of third quarter 2012. Yet time spent watching video via the Internet increased 37 percent, while minutes spent by mobile subscribers watching video on a mobile phone rose 25 percent during the one-year period. I know that the video content I’m streaming eats up a lot of data, so I’m careful to use Wi-Fi whenever I can. But I often am disappointed in the availability or strength of my Wi-Fi connection and I long for a scenario where I could just use my existing cellular connection to seamlessly deliver my content when I want it, wherever I happen to be. That scenario may be unlikely – unless some pretty significant hurdles are overcome. For one, operators have little incentive to let OTT players like Netf- lix and YouTube eat up valuable bandwidth on their network without receiving some sort of payment for the delivery of those services. One new business model being debated within the industry is where MINIMIZING OTT providers subsidize the cost of the mobile data consumed by their customers. Although some operators, such as AT&T, have expressed an interest in this, few OTT players seem amenable to the idea. Second, some fear net neutrality issues – particularly if operators appear to favor OTT services that they have billing relationships with over other OTT services, such as giving some higher quality of service than others. But there are alternatives. Some operators are deploying platforms THE OTT and products that promise to make OTT content better and easier for consumers to access and will help operators monetize these content offerings. This ebook will provide an in-depth look at the threat from OTT pro- viders, and examine how operators are making progress in delivering THREAT content to their customers. l SUE MAREK /// EDITOR IN CHIEF /// FIERCEWIRELESS 03 05 06 08 11 13 THANK YOU TO OUR SPONSOR: Multi-Screen Counterpath Enables Ott for The Push to Gsma’s Rcs Operators Cultivate Taking a Vision Offers New Wireline and Wireless Operators Monetize Ott Gains Traction Relationships with Peek at Opportunities Helping to Disrupt the Disruptors Content with Operators, Ott Providers to viewdini for Operators Despite Slow Start Present United Front Sponsored Content FEBRUARY 2013 2 FierceWireless.com Multi-Screen Vision Offers New Even new contracts may not experience more synchronized, per- broaden their source of content to Pay-TV providers’ cloud-based extend across platforms. “Some sonalized and socialized. include diversified choices, he said. multi-screen services closely Opportunities for Operators of the content providers are still There is also a marketing chal- Though many young adults do resemble OTT services in that they BY TAMMY PARKER paranoid about the secu- lenge for multi-screen services. not sign up for pay TV services, or are not tied to a particular delivery rity mechanisms for Not only must customers be edu- at least delay signing up until they network or device. “So it’s not a being able to view con- cated regarding available content Multi-screen is viewed as a tiple screens are tent beyond the set-top and methods for accessing it on way to engage customers becoming. Ameri- box,” said Ron Westfall, multiple devices, but multi-screen “Using basically the same technology across platforms, as well cans’ monthly time research director, service services require an appealing they’ve been using to deliver multi-screen as reduce churn and attract spent watching QUARTER 3, 2012 — US provider infrastructure, at price point. Bachelet’s research of services to their subscribers, operators new users. video via traditional Current Analysis. 17 pay TV operators in six coun- can extend multi-screen services beyond TV rose less than Naturally, there are also tries revealed that three quarters their subscriber base.” Pay-TV operators have long 1 percent year over technological challenges. of them make cross-platform sought to deliver content to year as of the third Delivering content to content available for free to their CESAR BACHELET, SENIOR ANALYST their customers via any device quarter of 2012. Yet televisions is a lot simpler pay-TV subscribers. AT ANALYSYS MASON. and any network, but what time spent watch- than delivering content was formerly a desire is now OPERATORS JOIN a necessity for competitive THE OTT CROWD are a bit older—perhaps once they very big step for them to deliver positioning. Americans’ monthly time spent watching video via There is ongoing debate regard- land a good-paying job or start a their own over-the-top services to “Multi-screen services are traditional TV rose less than 1 percent year over year ing the competitive impact from family—that trend does not appear non-subscribers if they wish to do now becoming table stakes as of the third quarter of 2012. Yet time spent watching OTT content providers, but it to be directly tied to their third- so,” Bachelet said. for pay-TV operators in devel- video via the Internet increased a whopping 37 percent. appears pay-TV operators are not party OTT content consumption. “Using basically the same technol- oped markets, particularly in losing considerable revenue to Further, people who sign up ogy they’ve been using to deliver light of competition from OTT OTT alternatives. for premium pay-TV service are multi-screen services to their video services offering con- “It’s not a zero-sum,” said West- more likely to pay for content on subscribers, operators can extend tent to multiple devices,” said ing video via the Internet increased to PCs, tablets, and smartphones, fall. In fact, people who watch Hulu an iPad while away from home. multi-screen services beyond their Cesar Bachelet, senior analyst a whopping 37 percent, while min- which all feature different operat- or Netflix at home on their TVs do “That’s creating a new opportu- subscriber base,” he added. at Analysys Mason. utes spent by mobile subscribers ing systems as well as a plethora of not necessarily cancel their cable nity that hadn’t existed before,” This is already happening. One Some operators may only watching video on a mobile phone screen sizes. The good news is that or satellite TV service. They just Westfall said. example is UK satellite pay TV pro- have basic multi-screen rose 25 percent during the one- “operators have the tools in place to vider Sky’s July 2012 launch of an services, offering access to year period. not only support multi-screen video IPTV service called Now TV, which some content via the EPG but to scale and enhance it to allow is available for use by non-Sky (electronic program guide) on GETTING OVER THE HURDLES application innovation,” Westfall subscribers on numerous platforms Free to all pay-TV various devices, typically PCs, Despite inroads made by pay-TV said. 76% subscribers including Microsoft’s Xbox 360, PCs smartphones and tablets. providers in delivering cross-plat- He said new standards will further and Android, Mac and iOS devices. Others are more advanced form content, obstacles continue to help enable delivery of higher-quality Sky also has another IPTV product and enable remote recording plague the industry. multi-screen content. For example, BUSINEss 6% Paid-for for non-Sky customers called Sky on a DVR and more remote One major impediment has been MPEG DASH (Dynamic Adaptive moDELS FOR optional extra Go Monthly Ticket. interaction with the pay TV content rights. Many older con- Streaming over HTTP) will support MULTI-SCREEN The key challenge for opera- service. But all are working tracts for content delivery were not adaptive bit-rate content for multiple SERVICES 18% Only included tors getting into the OTT game is to engage customers across negotiated on a device-agnostic, devices, while High Efficiency Video for higher-value to ensure they do not cannibalize platforms in order to reduce or cross-platform, basis, and those Coding (HEVC) will enable the next subscribers their core user base, Bachelet said. churn and attract new users. legacy agreements prevent most iteration of compression technol- That will likely drive service provid- Nielsen’s most recent pay TV operators from making all of ogy for HD Video. Further, service ers to offer even better premium Cross-Platform Report their content available on all devices, delivery platform enhancements will * based on sample of 17 pay TV operators in content for their traditional pay-TV France, Germany, Italy, Spain, UK and USA reveals how important mul- Bachelet said. enable operators to make the viewer subscribers. l Source: Analysys Mason 3 FEBRUARY 2013 FEBRUARY 2013 4 FierceWireless.com Sponsored Content The Push Further, in mid-January 2013, the appear less than enthusiastic about CounterPath Enables OTT for head of France Telecom said the this business model, claiming Wireline and Wireless Operators between the mobile and Wi-Fi / to Monetize Orange-branded operator has com- operators should simply be glad for Broadband networks. Ultimately, pelled Google to compensate it for the data traffic generated by OTT Helping to Disrupt the Disruptors CounterPath ensures that all OTT Content Google-related traffic sent across offerings and not seek out addi- mobile services will be available BY TAMMY PARKER Orange’s networks.

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