Bryan Hill, Director, Platforms at Interxion: A Digital Realty Company, discusses the steps to building a strong IT infrastructure in order to generate user interest and long-term subscribers in the OTT media services market, and why colocating IT in a dense connectivity hub is beneficial.
In response to COVID-19 related quarantining and lockdowns, the hunger for at-home streaming skyrocketed beyond expectation. What was once a US$110.1 billion industry in 2018, the OTT media services market is now predicted to grow to US$438.5 billion in revenue by 2026.
In the UK alone, people doubled the number of minutes spent streaming video content each day and 12 million subscribed to a new streaming service. Netflix seized a large slice of the increased user population early, doubling its expectations and adding 15.77 million paid subscribers globally in the first quarter.
Despite the uptick in streaming, there is of course a ceiling for how many OTT services can be successful, especially as COVID-19 continues to impact economies. Consumers are increasingly overwhelmed by the flood of subscription options and are less willing to pay for numerous, amidst an economy influx. To predict which services will prevail, it comes down to four factors:
- Fantastic, diverse or ‘must have’ content
- High-quality streaming experience
- Wide distribution
- Affordable price
With so many offerings competing for consumers’ time, OTT services need to nail each of these factors to earn a sustainable user base. At the same time, our global digital ecosystem is under immense pressure as more of our lives go online. Most digital companies have faced roadblocks as a result, particularly those facilitating heavy data exchange like video streaming.
Media services need IT infrastructure and strategies that can accommodate these rapidly changing demands and manage their exponentially increasing data creation and consumption at scale. For OTT services striving to edge out competitors, proper IT infrastructure can be the path to both superior quality and distribution. Though less glamorous than content, these factors provide the experience users demand – with potential to generate cost-savings that could trickle down to the final subscription price.
Critical connectivity
Already known for premium content, HBO launched its new HBO Max platform to further expand its offering and attract new users. More content means more data. More users mean more final destinations for this data. Only dense connectivity can deliver theatre-quality content to a massive population of users far and wide and to do it cost-effectively.
Initially, some OTT services may opt to build their distribution infrastructure on the public cloud for speed and scaling. However, the largest and most established platforms have carved their own infrastructure to gain control, deliver a quality experience and mitigate costs. Regardless of where services build, connectivity is the backbone behind a strong IT infrastructure for OTT media success. And flexibility is key.
By colocating their IT in a dense connectivity hub, service providers can optimise their network performance by interconnecting network traffic flows via a variety of ISPs, carriers, CDNs and Internet exchanges at global points of business presence. In addition, colocating at hubs that have cloud access points present makes it easier for those cloud-first OTT services to transition to a hybrid cloud OTT service easily. These hubs grow into dominant centres of data exchange and can connect services to their bursting user base.
This menu of connectivity possibilities allows services to switch between whichever network can provide the strongest connection, providing a cinematic experience whether streaming from a TV or mobile device. As a result, services are more resilient, delivering high-quality content even during high-traffic times. An added bonus is that the wide selection allows for cost to play a factor in connection selection, which could contribute to a more attractive end-user subscription price.
Proximity to your user-base
Price is most-often the make-or-break factor for whether subscribers will choose or stick with a media service. Apple took note of that recently, launching Apple One in late October last year. The service bundles several Apple services – TV, music, gaming and more – all for US$6 a month. Distributing this breadth of content at scale requires access to low-latency routes that tap the largest user-bases.
Services need to work with colocation partners that can place their IT at global points of presence, getting as close to the end-user as possible and going the extra mile through important interconnection hubs. By distributing their data across regions, services can deploy, connect and host critical data infrastructure in proximity to users, networks, clouds. This combined closeness to IT resources and thriving user hubs allows services to optimise their operation. With access to low-latency, reliable connections, OTT media can reach consumers quickly and at lower costs.
While the future of the OTT streaming industry seems to only get brighter, not everyone can grab a piece of the pie. As users become more mindful of just how many services are billing them each month, it’s more important than ever for services to seize a competitive edge. Content is what makes the big headlines and draws users in, but a strong IT foundation will foster the user-experience and price that maintains subscribers long-term.
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