Are your customers cutting the cable TV cord? With the explosion of options on the market, more broadband customers are opting for over-the-top (OTT) services like Netflix and Amazon Prime rather than paying for a cable TV subscription. This shifts the household priorities to the network, and more residential installations will require components such as media enclosures.
With video content projected to make up to 79% of all internet traffic by 2018, it’s a good idea to understand the OTT landscape so you can answer your customers’ questions about their options. OTT services are any services delivered over the internet that replaces a similar non-internet option.
In the US, there are an estimated 20 million internet users with no cable TV service. In Canada, there are 1.4 million internet users with no cable TV. Some of these internet users have never subscribed to cable TV, but a growing number have abandoned the traditional cable subscription in favor of OTT services.
The Telco Play
Internet service providers (ISPs) and other Telcos have taken notice, and many of them have moved into the OTT game. Telco participation in OTT takes two forms: platform development or partnership with existing OTT providers.
AT&T and Verizon have taken the platform development approach. Verizon has an OTT service called Go90, and the company has also launched Verizon Digital Media Services, a platform for developing and distributing OTT services. AT&T offers customers DirectTV Now, a service that offers about 60 channels for $35 a month and 120 channels for $70.
With AT&T and Verizon’s platforms, data used for the streaming service does not count towards customer’s data caps. This seems like a clever way to keep customers, but the Federal Communications Commission (FCC) does not approve. No action has been taken against either company, but the FCC wants to examine these deals.
The partnership option is popular in Canada. Shaw and Bell offer their customers Crave TV for only $6 a month and Telus offers Netflix for free with premium bundles. Bell Canada also has an internet protocol TV platform (IPTV) called Bell Fibe.
Comcast has partnered with Netflix, which is a huge deal. Netflix still owns the OTT streaming market but wants more growth in the US. The partnership with Comcast gives Netflix access to traditional cable TV customers an untapped market for them. And for Comcast, it’s good PR.
Netflix and Amazon Prime Video are now both available in Canada and the US, and they offer packages that include a mix of television reruns, movies and original content free of ads.
In the US, live content like sports games and the big networks are available through SlingTV and PlaystationVue. These live services include ads.
Getting started with OTT
If your customers ask you to recommend a service, your best bet is to tell them to go with the offering that has the content they like best, because they will get the most value out of it. Once they know what they want, all they really need is broadband internet and a PC. If they want to get all tricked out with smart TV devices such as AppleTV, Chromecast or Roku they need to make sure it will play their preferred OTT services.