How OTT Will Change Everything

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We've all heard the term Emerging Technologies, but there's confusion over what an Emerging Technology is.

The easy answer is that it is a technology extension of an existing medium, a new media technology or a new content platform. Some of these technologies are in place now but don't have critical mass; some have market penetration but are not being used to their full capacity by advertisers; and some are just a gleam in the eye of developers.

Emerging Technology Over The Top (OTT) is more than a gleam, but certainly hasn't achieved market penetration, yet. So now is the time to give it a serious look.

The easiest way to describe OTT is that it is a vehicle for web video and TV convergence. We have been talking for years about convergence; this technology is here now and gaining steam rapidly.

Here's a more technical definition:

Over The Top
The classic definition of OTT is the distribution of voice, video and data services without going through the MSOs or telcos. In this case, we are talking about a television set (usually a flat-panel) that is connected to the public internet as well as a private content distribution network (CDN) like a cable, satellite or telephone company. With OTT, there is another connection besides the CDN. It is through your computer to the internet and rides "on top" of the existing infrastructure. This means that you can program your TV to receive either the normal CDN, an internet site like YouTube or a GUI Widget that is a guide and search service as your default screen.

Who is doing OTT?
There was much discussion of OTT at this year's CES. Many of the major players have made commitments to OTT applications including Sony, LG, Pioneer, Samsung and others.

There are a number of ways to access OTT now:

  • Sony recently announced a Bravia companion box that is an Ethernet sidecar.
  • AppleTV is another example. You need to be running iTunes, but a lot of future apps will come with some kind of custom software to enable the ease of use on the part of the computer so why not iTunes? It enables you to watch content from a computer running iTunes on a television monitor.
  • SlingBox is another single function OTT box, as is TiVo.
  • Xbox extender is a great example. It has a GUI Widget that will help in selecting content. It has content, as Microsoft just announced a deal with Disney to make 35 high-definition movies available for download via Xbox Live. The arrangement will also add future releases from Touchstone Pictures, Miramax Films and Hollywood Pictures. Xbox Live currently offers downloadable movies and TV shows from two dozen content providers, and has more than 7 million members, according to the NY Times.

There are many other single function boxes and sidecars out there, but we see a limit to this. Consumers do not want more boxes in their stack, especially with their home theatre being "cleaned up" with a flat screen. It is logical, however, and the technology and protocols exist for a single box that replaces EVERY box under your flat panel+tuner. This includes your cable box, TiVo/DVR, internet capabilities, et cetera. This box can be built using today's technology for under a thousand dollars at retail and, at volume and with time, will get to under $500. We need someone to step up and do this. I know folks with the spec if you are interested, but VCs to date have not shown interest in building boxes.

Next: What OTT means for marketers

 

Comments

Vito Palermo
Vito Palermo July 20, 2007 at 2:39 PM

OTT has the potential to up end the traditional cable and broadcasting model. As much as the telco's and mso's would like to be the gatekeepers by providing consumer broadband connections AND the content, OTT challenges that business strategy. With OTT consumers can get content from any where or from anyone. Why can't I just have a 100mb/s connection for $39/mo like in Korea or Japan and then access all the content I want? Dave - I agree I want one box that converges all my digital media - DVD's, personal media and internet video.