Operators are starting to define a role for OTT, but is it aggressive enough?

Jim O'NeillOTTCon, San Jose, Calif.-- The news media--both popular and trade--likes to write about the impact of over-the-top content and delivery in the sexiest terms possible and, for the past two years, that's meant stories about cord cutting. (Mea culpa, mea culpa... I can't help myself, I continue to search for sexy cord cutting stories.)

While there's still plenty of room to debate whether cord cutting is myth or reality, there's no doubt that OTT is playing an ever-increasing role in any discussion about "TV of the Future."

Last week's news that Amazon was getting into the streaming media business using its Amazon Prime delivery service as a foot in the door, was just the latest move in a flurry of activity in the space revolving around Netflix, Redbox, Roku, Amazon and Apple.

IMS Research, meanwhile, Monday released a report that said OTT services were a major factor in the evolution of on-demand services from pay-TV operators, which "are becoming more robust each year with more free content and integration of over-the-top services."

The research company forecast that almost three-quarters of all VOD requests via pay-TV platforms will be free transactions this year, and that OTT content delivered via set-tops will account for a fair share of free transactions, as well as generating a forecast $48 million for pay-TV operators this year.

While that $48 million may not cause too many racing heartbeats, the $436 million IMS forecasts OTT services delivered via pay-TV STBs will generate by 2016 might.

"OTT services are becoming one of the biggest threats to traditional pay-TV operators, and with devices such as smartphones and tablets proliferating the marketplace, consumers are quickly becoming accustomed to on-demand multimedia consumption," study author, Anna Hunt, said. "Offering a variety of on-demand services is now essential for digital TV operators that want to retain market leadership status."

At last year's OTTCon, one of the biggest draws was a presentation titled "OTT: Friend or Foe?" There's little question, just 12 months later, that operators have become pretty sure they'd like to make it one. The trouble is, I still don't think they know how. -Jim