Scaling OTT Part 2: The channel conundrum
ByJanuary 24, 2013
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.
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