LAS VEGAS--While FCC Chairman Tom Wheeler was exhorting traditional broadcasters to take a fresh look at over-the-top content delivery at a Tuesday keynote here, visitors to the National Association of Broadcasters annual trade show were getting an eyeful and an earful of solutions for just that (or close to it). IP video is top of mind at the show, and it's beginning to change the way broadcasters and distributors do business.
Amid the slew of announcements surrounding a show this size, three trends in the industry are getting a lot of traction at NAB: 4K, managed solutions for OTT delivery, and an underlying sea change in traditional content distribution models.
4K will hit the ground running
In the runup to NAB, FierceOnlineVideo correspondent Josh Wein found that the market for 4K was tepid. That may be so, but numerous vendors are preparing for its commercial advent, and there is great anticipation at the show about when 4K will really hit the consumer market and how quickly consumers will adopt it.
In fact, this year NAB could have easily called its annual event "The 4K Show" based on the amount of exhibitors touting 4K compatible technologies.
If ATEME's progress in the 4K encoding arena is any indication, Ultra High Definition technology will take off fast and integrate much less painfully than HD did. The vendor's TITAN encoding solution is being integrated with 4K decoding hardware from vendors like Broadcom and STMicroelectronics, and ATEME is supporting 4K delivery across the industry.
A chat with Gavin Mann and Robin Murdoch, managing directors at Accenture, also suggested that 4K adoption by consumers will happen more quickly than HD: The prices of 4K television sets have dropped as much as 50 percent in the past year, according to a recent Accenture survey. Compare that to HD television prices, which dropped at a rate of 10 to 20 percent per year.
Further, Mann and Murdoch said, consumer awareness and anticipation of 4K is growing. According to Accenture's survey, 18 percent of respondents said they plan to buy a 4K TV within the next year.
Managed solutions for OTT are springing up
One of the themes emerging at NAB is the increasing number of OTT solutions to make moving content from one end of the network to the other less costly and far less complex (at least for the consumer). Microsoft (NASDAQ: MSFT), Ericsson (NASDAQ: ERIC) and Akamai were among those announcing their visions for standardizing the processes that make up everything from capturing and encoding the content to efficiently transporting and decoding it.
Akamai has offered its Aura content delivery network, with its option for on-premise or remote SaaS management, for a few years now. But Steven Chester and Chris Nicholson are aiming to offer what they call "Content as a Service" in partnering with vendors like Vubiquity and Verivue to help smaller pay-TV operators or OTT providers license, prepare and deliver movies or TV series to their customers at much lower cost.
Microsoft is banking on the ubiquity of its network and software to make Microsoft Azure the SaaS solution of choice for providers of all sizes, and it recently partnered with Ooyala, which builds tailored OTT solutions for its clients in order to deliver IP video reliably "from camera to customer," according to Solutions Managing Director Simon Jones.
At NAB and elsewhere, it seems that managed OTT delivery solutions are springing up all over. From Akamai's established Aura content delivery network services, to Adobe Primetime's playback and authentication solution, to Microsoft's Azure end-to-end product, distributors and broadcasters have an increasingly large pool to choose from for IP video.
Cablecos eye OTT possibilities, but will broadcasters?
According to Ooyala's Jones, content distributors like Comcast (NASDAQ: CMCSA) are increasingly moving toward OTT--if only to maintain their hold on the content. "These are frightfully profitable businesses," he said. "My guess is OTT is a way to hold onto their monopoly."
Like others in the industry, Jones feels that eventually a cable or satellite operator, likely a Tier 2 operator, will go all-OTT. But he doesn't think it will happen this year. Still, such a move would be a huge market disruptor. "That's when life gets really interesting for [an operator like] TWC or Comcast," he said.
While MSOs aren't highly visible at the NAB show, their impact is certainly being felt, because that move toward OTT is shaking the tree in which broadcasters reside. FCC Chairman Wheeler urged broadcasters to look at new business models on which they can "pivot" in order to change with the industry, rather than fight it.
Broadcasters are in a unique position. They own much of the content being created, and they have the infrastructure to distribute it--over the air, if nothing else. Wheeler sees these two factors as powerful assets to leverage against a changing industry. But he made it fairly clear that these content owners don't know what to do with all this clout.
The broadcast industry is the biggest gorilla in the room when it comes to content distribution, as their repeated attempts to stop antenna-to-streaming-device provider Aereo have shown. But that doesn't mean they aren't looking at consumer-level OTT solutions of their own. In the IP video space, broadcasters may be the last piece of the puzzle.--Sam