Photo: Bloomberg
Photo: Bloomberg

Video streaming services up the ante on content

Are these over-the-top (OTT) services disrupting the media industry? Mint takes a look

Two large brands—Apple and Disney—are entering what appears to be an already crowded market of video streaming services. Are these over-the-top (OTT) services disrupting the media industry? Mint takes a look.

What are OTT video services?

OTT video services use the Internet to deliver content such as TV shows and films to a variety of devices. Netflix is among the most prominent players in this space, and has been joined by many others, including recent entrants Apple and Disney. There are also many India-centric services such as Hotstar, Eros Now, Sony Liv, Jio Cinema, ALTBalaji, Zee5 and MX Player. Some of these companies, such as Netflix, are independent startups. Most of them, however, are legacy content producers such as Disney, Star, and Zee, or telcos such as Airtel and Jio, that have launched their own OTT video services.

What’s their value proposition?

The traditional alternatives to OTT video are linear broadcasters that provide programmed content through cable or satellite set top boxes. Movie theatres, too, are competitors. OTT providers offer two key benefits: access to content on demand without having to wait for scheduled slots and availability on multiple devices without being limited to a physical location. The impact is that video consumption is moving from being a shared, family activity to a personal pursuit. Beyond these, providers are creating original and exclusive content for their platforms, in addition to just hosting or aggregating a library of shows.

Is OTT video cheaper than traditional alternatives?

Each OTT content app requires a separate subscription. On top of this is the cost of an Internet connection. On a like-to-like basis, however, the cost of a bunch of video streaming services and a broadband connection doesn’t appear to be much higher than that of a cable or satellite set top box connection (see graphic).

OTT, at best, is just an alternative distribution or aggregation mechanism
OTT, at best, is just an alternative distribution or aggregation mechanism

So is it disrupting the media industry?

It is fashionable to talk about Netflix disrupting the media industry. But OTT, at best, is just an alternative distribution or aggregation mechanism. All major content providers have entered this space, and even traditional distributors are creating new aggregation models. The real disruption is happening in video compression technologies, which reduce the bandwidth required for content, and in streaming lag, which reduces the time gap for live video such as a sports event to reach the device.

What is the future for streaming video?

OTT offers massive opportunity for personalization. We are now participants in creating content. Shows like Bandersnatch allow viewers to decide how the story progresses. Interaction with content is moving to a different level. Imagine chatting with the star of a show while watching it, or ordering sunglasses worn by a movie hero in a particular scene. There is also immense possibility for searchable micro-content, including viewer-created content.

Srinivasa Addepalli is founder and CEO of edtech startup GlobalGyan

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