Sitting in this week's TelcoTV opening keynotes, it was apparent that some industry perceptions about OTT need to be changed, and quickly. As our readers are aware, OTT is not exclusively an us vs. them proposition. It is not just about PayTV vs. OTT; it is not just about Comcast vs. Netflix. OTT is much more than just hybrid devices joining Vudu, DVR, and free over-the-air broadcast together into a single service. It is even more than allowing existing service providers to compete out-of-market.
Regardless of the finely nuanced definitions of OTT (see Colin's video on the confusion surrounding OTT forecasts), OTT is fundamentally about reimagining of the consumer video experience. The roles of the players that are now more clearly understood - from content creators to service providers, from CE manufacturers to retailers and movie theater chains - each have the ability to assume new identities in the evolving video equation. It is a world where suppliers and customers can become competitors. It is world where consumers have greater choice regarding where they go for content and the nature of the relationships needed to deliver it. Indeed, the ultimate consequence of OTT may very well be Vendor Reassignment (think "Dancing with the Stars"...).
Yes, content owners are exploring direct-to-consumer offerings as an additional distribution channel. Yes, HBO Go may be a pathway to selling directly to end-users. But let's think about some of today's more obscure entities that already, or may soon, compete in the OTT space.
Retailers - We're already seeing a significant shift from physical to digital. Walmart acquired VUDU and Best Buy has rights to the CinemaNow name running on the Rovi Entertainment Store platform. These are transactional services capable of delivering content directly to numerous consumer devices. The likelihood these entities will expand into full-fledged TV service providers is is limited, but these stores are embracing the reality of ever-dwindling DVD sales. Best Buy is currently redesigning about 40 units to create the Best Buy Connected Store format. Part of this redesign includes a dramatic shrinking of the physical media departments.
Hospitality - LodgeNet, the VOD service for hotels, recently joined DECE to support UltraViolet. While the thought of enabling consumers to reach their content locker from the hotel room is enticing, this move was clearly positioned as a "Future Pathway for LodgeNet to Offer Content for Sale." Imagine renting a movie in the hotel, often while the film is still in theaters, and for an extra fee purchasing a digital copy to be released to your locker once the DVDs hit store shelves - or shelf as in the case of Best Buy's shrinking floor space above.
Movie Theaters - Movie theaters, already dealing with reduced interest in 3D ticket sales, now face additional threats from shifting release windows. Though Comcast's $60 test with "Tower Heist" was wisely canceled, early release will continue to be an on-going experiment. Much like the hotel example, theaters may also have the ability to pre-sell digital copies at the time you first view a new film.
While none of these services are replacements for today's PayTV services, they offer a glimpse of how video delivery can and will change because of the move to digital.
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