Our recent analysis of the scaling costs for OTT concluded that platform-agnostic OTT services cannot be scaled to deliver simultaneous mass-audience television at the current cost base. The same scaling issues also apply to single mass-audience channels, but for channels with a low to medium viewing share, scaling for OTT may not be such an issue. OTT streaming can work out cheaper than broadcast for individual low-medium consumption channels. But the current economics of the television business mean that OTT remains an incremental cost rather than a substitutive one. Nonetheless, the cost analysis highlights the potential importance of OTT Unicast streaming as a potential substitute for broadcast once the distribution and installed user base scales. By extension, it highlights a potential new business role for IP infrastructure owners in the channel distribution market.
Tables and charts included:
- The Multichannel value chain;CDN Unicast Streaming calculation;BARB-rated channels ranked by satellite broadcast cost as a multiple of equivalent streaming costs;Number of channels at each multiple category (against satellite costs);Channels by weekly cost range for CDN delivery;UK BARB rated channels with a terrestrial feed
Tables and charts: 12
Research Director, Television Media
Maria Rua Aguete is a Research Director, Television with IHS. She has more than 15 years research experience covering the global television markets. Maria leads the Television and Service Providers Research team and she has participated in a number of reports including the annual European Cable Yearbook.