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Win Video, Win All

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VENDOR VIEW – Huawei partnered with Telecoms.com Intelligence to explore how telcos can best position themselves to capitalize on the rapidly evolving TV and video market.

Intro

With the traditional landscape of TV continuing to shift, TV is changing! There are three distinct transformations happening now that has continued to gather pace over recent years. The operation owners are changing as OTT players continue to disrupt the market with their agile business models and telcos expand their service range to counter the OTT growth dominating their networks. The quality is evolving as 4K content increases in availability, with 8K already visible on the horizon. And consumer behavior is diversifying. More devices, smarter phones and tablets, and IP Set-top boxes lead to more multitasking with companion apps and second-screen viewing. There is now more choice as the range, availability and accessibility of content grows. The consumer wants any content, anytime, anywhere. In 2015, you cannot do video without doing it everywhere.

The changing future of TV presents many challenges, and as many opportunities.

Trends

Video Everywhere is now mainstream. The last five years have seen early adoption by first-to-market operators shift to wider deployments by operators already offering video services, as new technologies have enabled advanced capabilities across and between screens. Demand has been driven by consumer behavior and expectations that the Video Everywhere experience be instant, personalized and social media-friendly, across multiple screens. Viewers don’t just watch anymore; they want to interact.

Nielsen reports that television viewers enjoy programming more when social media is involved.   A recent study found that 25% of TV viewers were more aware of TV programs due to their social media interactions, with 15% saying they enjoyed television more when social media was involved. An Accenture study found that 68% of TV viewers use a second screen, as multitasking becomes the norm. The playing field for consumer engagement has diversified, from the living room to anywhere & everywhere. Winning the coveted trust relationship that broadcast TV has enjoyed for many years is key to any video offering. As traditional pay TV in many markets stagnates, new opportunities and business models driven by consumer demand for alternate video services continue to fuel global growth in a global USD500 billion market. Subscription video on demand (SVOD) is now becoming the dominant revenue model, and is expected to grow globally by 100% over the next five years, complimented by availability everywhere. Across Europe, 78% of operators now offer a multiscreen service, with 80% in the North America. More operators will continue to launch and offer Video Everywhere OTT services as online video growth y/y continues at amazing pace of 400% (4). Already, the first 30 days of 2015 have seen new services launched in the Americas, Europe and Asia as video becomes a basic service.

As content becomes more available and accessible, the operation owners are changing. Original content creators and rights holders and owners, including the traditional Hollywood media companies, are now able to reach out to audiences directly with IP distribution channels more available via OTT and Internet. Their reach can now directly target end consumers, diversifying from the more traditional broadcast distribution that has served the industry for many years.

Content aggregators like Netflix and Amazon have changed the distribution and business models as SVOD over takes Transactional VOD to become the dominant IP video model, extending their reach backed by large content distribution networks (CDNs). With the ability to deliver cloud-based infrastructure and services for management and distribution of video to any Internet connected device, they have developed the ability to intercept and manage the needs and behaviors of online consumers.

The manufacturers of handsets, tablets and smart TVs are also expanding their reach towards consumers through their own online stores. The opportunity for telcos to grow their revenues and subscriber base is to expand their reach across the content value chain and build their service offerings, complimented by IP video.

Telco Advantage

A successful proposition in the video market will need to fulfill a rich set of customer requirements. This means compelling propositions, backed up by the key asset capabilities that telcos hold. The availability of a wide catalog of attractive differentiated content is one of the most important assets of an IP video service.

A key telco advantage is the billing relationship and capability to act as single point of contact and a common user interface to the consumer over any device. With large advanced network infrastructures and technologies in fixed and mobile broadband, telcos hold a distinct advantage in their network footprints and reach to consumers, when complimented with CDN distribution; enabling OTT delivery across all networks. Traditional network infrastructures guarantee the much needed quality of service (QoS) for user experience, with LTE mobile broadband speeds increasing and FTTx deployments providing fixed broadband speeds in the hundreds of Mbps.

With video content now the Internet’s dominant form of traffic, and continuing to grow, video can be used to drive bandwidth for telcos and provides an opportunity to monetize traffic already being consumed. The ability to leverage consumer insights from the existing billing relationship and demographic is another big advantage that will enable tailored and personalized video services across IP infrastructure, and a further opportunity to challenge both the traditional top-down programming schedules of broadcast TV channels and newer business models of OTT players, and to build brand loyalty and a compelling consumer experience.

It’s more important than ever that all operators have a deep understanding of changing consumer behaviors and interests, so that they can limit the risk and direct their investments effectively.

As video consumption on a variety of devices becomes a way of life, the collection of real-time actionable intelligence becomes of prime importance. Building an engaged, segmented audience is key to delivering highly-personalized content based on viewer behaviors for both live and on-demand media. This means seeing, analyzing, and acting on data at a granular level. Insight, analysis and measurement of user data typically fall into three general areas:

  • Quality of service: Ensuring reliable content reaches multiple viewing devices in many formats is a constant challenge, but critical for maintaining a good user experience.
  • Audience behavior: Tracking audience behavior down to the individual viewer level in real time provides data that is used for many purposes, including customized delivery and recommendation of programs and promotions.
  • Big data strategies: Detailed analysis on individual users and their behavior, including who they are, where they are, what they watch, how they engage and which devices they are using, is very valuable to operators seeking to optimize their investment and build a successful monetization strategy.

The ability to attract and aggregate content directly, and from third-party sources across the network infrastructure and platforms the telco operators hold, is a key asset capability to provide value-added services from a multitude of sources in a way that consumers find easy to use as video becomes a basic service.

Achievements of Huawei

Huawei is the number one vendor of end-to-end IP video solutions, serving 70 operators and 30 million subscribers, with 37 million subscriber capacity.

(Huawei is participating in the Mobile World Congress 2015 in Barcelona, Spain. For more information, please visit: http://www.huawei.com/minisite/mwc2015/en/index.html)  

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