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Bright future for OTT video – if the network can support it

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Before the internet, almost all network services were provided by the network operators themselves – revenues came from the sale of retail network access, voice calls and simple data services such as text messaging. As the internet matured, video became an important element driving demand for network capacity. 

At the same time as smartphones and apps became ubiquitous, over the top (OTT) apps emerged, substituting traditional network-provided services such as voice, messaging and TV/video. This has proved to be incredibly disruptive to the whole industry and has enabled new and innovative players to enter the market. 

This was a subject of an Institute of Telecommunications Professionals (ITP) seminar hosted at BT Centre in London this month and attended by about 100 people. Expert speakers from Nokia, BT, Cisco and Akamai examined these trends, looked at the ways the various players are responding, and considered where next for OTT services. 

Paul Adams, Nokia marketing director, drew on some analysis that shows that video is, and will continue to be, the main driver. OTT video is disruptive to convention linear TV and subscription TV players. The pay-per-view OTT players are now producing highly competitive and excellent content and big companies, including Facebook, AT&T and Amazon, are staking their future on it.

However, apart from movies and live sport where quality matters, monetisation continues to be a challenge, particularly where huge numbers of relatively small players are now producing good-quality content.

Matt Stagg, director of mobile strategy at BT Sport, looked at how developments in mobile have fuelled the demand for streaming live sport. 4G (and the BBC iPlayer) led to the rise of video streaming, but with live sport, the simultaneous demand from users to view the same event places huge demands on the network. 

And the demand cannot easily be forecast – it depends on how the event plays out (England knocked out early in a tournament, for example), the time of day, the weather, and whether the event is on pay TV or free-to-air. 

There are also technology advances such as high dynamic range (HDR) that place yet more demands on bandwidth. 5G will be faster – the early deployments of 5G are expected to be where 4G capacity cannot be increased. 5G also promises improvements in quality resulting from its network slicing functionality.

OTT opportunities for businesses

Aminder Athwal, standing in for Cisco CTO Dominic Elliot, reviewed some of the opportunities of OTT for businesses and the challenges in meeting those opportunities given the security and reliability imperatives of business. 

As in the consumer space, businesses are expected to make more use of video for collaborative working. Corporate networks today tend to be disparate, with perimeter security. This will move to a common network with embedded security. 

Although OTT goes end to end, it is hugely reliant on a concatenation of correctly functioning underlying networks – networks that will be increasingly software-defined and with virtualised functionality. It is complex and the challenge is to make it very simple and seamless for the business user.

Ian Munford, director of product marketing for media solutions at Akamai Technologies, drew the analogy between the anarchy of the early days of broadband with that of today’s OTT services. The OTT video streaming trends are clear, yet daunting – audiences are getting bigger and watching for longer in higher resolution. 

Content delivery network solutions

However, it is questionable whether streaming can completely substitute for broadcast linear TV over satellite, cable or aerial. The limitation is not in the last mile – the capacity increases that are either already in place or planned will cope – but rather in core networks. Part of the solution lies in content delivery network (CDN) solutions – caching content nearer the edge, pre-positioning content on user devices, moving away from TCP in favour of UDP, use of multicast. 

I moderated the panel session covering questions on the payment model, the impact on traditional linear TV aggregators, the capacity upgrade potential of core networks, the role of fibre to support 5G radio access, the implications of virtual reality (VR), and governmental intervention to support users in rural areas.

However, the OTT video streaming space is so fast-moving that it is difficult to be categoric on any of these questions. For example, governmental intervention might be appropriate, perhaps by some form of universal service obligation (USO) for video streaming services, but the trends are proving so disruptive to the whole industry that intervention at this stage could have unintended consequences.

On VR, the view was that the main consumer drive is coming from gaming and there are unlikely to be mainstream applications any time soon, although there are bespoke applications in medical, emergency and industrial areas. User-generated content is becoming increasingly professional – for example, Twitch, an OTT platform to watch other people playing games.

Overall, the view was that OTT video-streaming services will have a massive impact on the industry and on the supporting network capabilities.

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