Over The Top (OTT) is a platform that enables service providers to deliver video, audio and other media over IP networks without any technical collaboration with network operators. Over the years, the growth of OTT has posed a direct challenge to global telecom operators in terms of revenue and customers. The adaptability and usage of OTT applications has increased significantly as OTT providers offer a similar alternative to telcos in terms of functionality at a much lower cost.
The Potential of OTT
Today, all Internet-connected devices are capable of installing OTT applications. OTT services have come a long way. What started as a minimal call application a decade ago has become a multi-communication channel. the rapid growth of OTT applications is supported by a thriving entrepreneurial ecosystem and scalable innovation. Pioneering developers are working to integrate innovative features. The promises made by tech giants over the years have begun to become reality. The evolution of future OTT apps is reflected in emerging business models, platform and app distribution, and consumer behavior.
The impact of OTT disruptions on content service providers (CSPs)
As consumer preference for OTT services grows, key players in the telecom industry face a dual challenge. First, telcos are struggling to power the digital world with fast, reliable and secure networks. Second, telcos need to meet the growing customer demand for on-demand content.
Telcos have yet to adapt to the highly disruptive transformative power of OTT. the emergence of OTT has eroded telcos’ messaging revenues. It is difficult to quantify the market share captured by OTT. However, its impact on traditional services such as voice and messaging has been significant. It is worth noting that OTT applications have also captured a younger generation that prefers social media to traditional communication methods.
What can telcos do?
Telcos must look for opportunities to expand their revenue streams. They can leverage their vast fixed and wireless networks, millions of customers and customer data – they also sit on a treasure trove of consumer big data, which they can monetize through enhanced data analytics. Another way to reduce operating expenses is to share infrastructure, which most countries are doing. Telcos know they will have to co-exist with OTT. The solution is for telcos to reduce costs and develop new profit pools with the help of some “easy” regulation.
OTT services: an opportunity for telcos
Partnering with competitors
First and foremost, customer conversations cannot be defensive for telecom operators. Therefore, operators need to shift their focus to improving customer satisfaction. Proactive telecom service providers are able to identify demanding consumer behavior for on-demand OTT services. Such telecom operators (Telcos) have started working with key players in the OTT industry.
Befriending new business
Second, interactive content platforms can bring competitive operational efficiencies to telecom operators. Clearly, partnering with successful content platforms can help telcos generate significant revenue from OTT services. revenue models such as AVOD (Ad Video On Demand) and SVOD (Subscription Video On Demand) can help telcos see value in their spend. For operators looking to develop content platforms – in-app purchases, streaming broadcast media on mobile devices, and supplementing advertising with secondary advertising are some of the proven revenue models.
Digital communications platforms remain an open space for telecom providers to innovate with the right business models and position themselves as the brands of the future. In the past, the telecom sector has overcome huge hurdles. With the right strategic outlook, telcos can ride the OTT success boom and capture incremental value in terms of consumer base and revenue streams.
The new engagement will build brand loyalty through highly personalized, transparent and value-based experiences, enabling operators to compete and win long-term customer relationships in a new digital era.
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