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
Executive Director – Media, Service Providers & Platforms
Ms. Maria Rua Aguete is an executive director of Media, Service Providers & Platforms at IHS Markit who leads a global team responsible for research on TV, online video, broadband , mobile, connected devices and media consumption.