Jan. 26 2018 — The following post comes from Kagan, a research group within S&P Global Market Intelligence.
Now that a number of over-the-top providers have been operating their services for several years, the focus in OTT technology is moving away from simply getting the content to the viewer. Providers are now looking to improve upon the basics by:
- Easily seeing the data from viewer interactions, service performance, etc.
- Better monetizing content when it comes to advertising revenue models
- Reducing the latency involved in delivering content for live streams
- Better navigating in the end-user application
- Surfacing the content most relevant to the viewer
Regarding the first bullet above, providing insights from the large amount of data captured by OTT providers from every part of the OTT ecosystem is a high priority for vendors. This enables their OTT provider customers to use data to inform what content to buy, which delivery networks are performing well, which customers are more likely to churn, which ads to serve, how to present the content, and much more.
Optimally monetizing OTT services via addressable advertising is taking center stage for those with advertising revenue models. Advertising technology vendors want to help OTT providers use data to sell advertising that reaches only viewers who match the demographic profile the advertiser is seeking. OTT video is ideal because it often reaches an audience of one. Many OTT providers are working with ad tech vendors to offer their ad inventory programmatically so trading is done in an automated fashion. As U.S. broadcasters deploy ATSC 3.0, they too are making investments in addressable advertising technology.
CDN providers Akamai Technologies Inc. and Limelight Networks Inc. are investing in reducing latency for live sports streaming, as well as online gaming and gambling. The WebRTC protocol, a real-time communications protocol, is one of the technologies that will be used for these efforts.
OTT technology will remain very fragmented with many vendors offering various pieces of the processing chain. There are few barriers to entry, so we expect more vendors to announce themselves in 2018.
Another important part of OTT service improvement is providing the best quality video in the most efficient manner to reduce costs. This will be the year that AV1 from the Alliance for Open Media will be ready to go to market. We are interested to see if it lives up to its promise of greater efficiency than HEVC with no need to pay royalties. However, video compression improvements will not stop there.
The Joint Video Exploration Team, or JVET, is exploring future video compression technology under the auspices of the International Telecommunication Union, or ITU, and Moving Picture Experts Group, or MPEG, organizations. In October 2017, MPEG published a call for proposals for video compression technology that will go beyond the efficiency of high efficiency video coding, or HEVC. The proposed technology will be tested in early 2018 with an evaluation performed at the April 2018 meeting. The goal is to complete a new standard in 2020.