Ovum comment on OTT TV

However, operators should not rest easy, warns the global analysts; besides enjoying significant brand equity, a handful of key OTT players, such as LOVEFiLM and YouTube, can also leverage the financial strength and assets of their parent companies (Amazon and Google, respectively) to substantially improve their positioning.

The first iteration of Ovum's OTT TV Player Positioning research* - a dynamic tool objectively assessing key players within the Internet TV space - reveals that although OTT TV services now more closely resemble those of their network-based competitors, they have a long way to go before they can match the quality and breadth of content of traditional pay-TV offerings.

"While we expect OTT to become increasingly integral to the home video entertainment mix, there's little evidence yet of consumers dropping their pay-TV subscriptions in favour of purely operator-independent solutions," says Jonathan Doran, principal analyst at Ovum. "For the time being, OTT will remain a complement rather than an alternative to pay-TV."

Supported by research

This is supported by Ovum's consumer insights research,** which shows that half of consumers with connectible video devices, such as PCs, tablets, consoles, smartphones and smart TVs, are using OTT services to catch up on TV or watch movies. However, these services have yet to displace traditional forms of consumption, with more than half of these users still subscribing to pay-TV services.

Ovum's OTT TV Player Positioning research examines the disruptive impact of OTT player initiatives on the market. It looks at how traditional pay-TV operators will be affected, and outlines the potential for forming partnerships. "For their mutual benefit we believe it is paramount for operators and OTT players to collaborate, yet we have seen little evidence of this to date, with the notable exceptions of Xbox Live and Samsung," comments Doran.

Elsewhere, the tool's content service providers (CSP) assessment feature reveals that BBC, with its iPlayer service, achieved the highest overall score, outdoing other players in the areas of content attributes, consumer experience, and business environment. Samsung, meanwhile, as a TV application platform and storefront for third party services, emerged with the lowest CSP assessment positioning, receiving weaker scores for content attributes, consumer experience, and marketing.

"As competition in the TV services market hots up, there is a crucial need for clarity and guidance for all those involved. While traditional service providers must understand how new entrants are threatening their established revenue streams, OTT players also need greater direction to leverage partnerships that will enable them to deliver quality experiences, attract loyal consumers, and ultimately make money from TV services," concludes Doran.

Notes:

*OTT TV Player Positioning. The selection of players profiled is based on Ovum's view of which companies are having significant impact on the evolution of the OTT TV space. The initial list consists of: Amazon, Apple, BBC, Google, Hulu, Netflix, Samsung, Sony, and Xbox Live.

The data and player profiles are updated on a quarterly basis, with refreshed KPIs as well the latest industry developments and announcements relating to the key players. The disruptive impact vs partnership potential analysis sections will be informed by developments and changes that have taken place during the previous quarter.

**Ovum's Consumer Insights Survey is based on data obtained by a survey of more than 3000 UK broadband users. The survey was conducted via a new interactive Internet-based platform developed by one of Ovum's survey partners. The questionnaire covered a range of topics related to broadband access and the connected home, including broadband speed satisfaction, important factors when choosing a broadband service provider, perceived issues around the home network, the range of connected devices currently in the home, uptake of connected home/broadband VAS services, impact of social networking on traditional digital communications, brand identity, and brand trust.