Smaller channels could be OTT-only in 5 years

Small to medium-sized channels could opt for over-the-top delivery alone between five and ten years, according to a new report from IHS Screen Digest.

It is not currently cost-effective for television channels with large audiences to move to OTT-only delivery. However, an analysis of the UK television market suggests that about two-thirds of the country’s major channels could afford a unicast OTT-only delivery model five to 10 years in the future. Of the 192 channels rated by the Broadcasters’ Audience Research Board (BARB), only 58 have such large audiences that moving to a pure-OTT approach would be cost ineffective.

“For large consumption channels – ie, channels with large audiences – the economics of OTT streaming remain highly unfavorable, with the cost in some cases hundreds of times greater than broadcast on satellite,” said Guy Bisson, research director for television at IHS. “However, for channels with a low to medium viewing share, scaling for OTT may not be such an issue. It’s true that high definition (HD) makes OTT unaffordable for any channel regardless of its audience size, and that any discussion of moving away from traditional satellite, cable and terrestrial and to OTT is academic at the current time.

Already the means exist to piggy back on the digital terrestrial system with companies such as the Arqiva-backed Connect TV using the MHEG Interaction Channel to offer OTT delivered channels direct into Freeview receivers. YouView has similar plans and BT Vision is currently busy signing up major brands to be carried over its broadband network.

IHS says there will need to be a consumer-facing OTT platform with significant reach to bring the cost of unicast down. There must also be a larger shift in consumer behavior away from linear scheduled television.