I was fortunate enough to attend the Over the Top digital video conference this week in Santa Clara (thank you MESA). It was one of the larger conferences that I have attended for the content with about 400-500 people in the main presentation room during the keynotes (CES and NAB are bigger, but most people are not there for the content, they are there for the sales opportunities).
There were some great panels and some interesting points of views exchanged on the most relevant topics affecting those companies in the OTT Digital Video Ecosystem. I thought in general that the panelists and presenters were a good mix of service providers and content owners/distributors (Fox, NBCU, etc), though some of the smaller concurrent sessions where blatant (and poorly presented) commercials.
The quote that summed up the conference for me was "The future of OTT will be won by service providers who can deliver Discovery on the Second Screen" I couldn't agree more.
While there was some interesting banter on exactly what "OTT" meant to different people on the panels (with the day 2 keynote Jon Cody speaker suggesting we scratch the name OTT and replace it with Broadband TV), I was surprised at how few people attending the conference understood the second screen or even what Discovery was (more on that next week). My other big surprise was how pervasive the view that OTT (or Broadband TV) was somehow going to grow up and kill Comcast, DirecTV, and/or Verizon (examples only). Thought the stats were thrown around the conference both days, a ton of the attendees just didn't seem to process them. We all know that Netflix has 20m+ subscribers, that Apple has sold 4m+ Apple TVs and that on-line video is growing quickly, but we somehow fail to remember that of the roughly 37 hours of TV that the average American watches every week (not sure where the average person finds the time), only 3 of that is on-line (web, OTT, or otherwise). Further, that of the $200b in TV advertising, a scant $4b (2%) is spent on online/OTT video, and despite the fact that OTT has taken a significant chunk of the DVD business (close to 20%), when compared to the combined sell-thru, TV advertising and Pay TV amounts, the Netflix, iTunes, Hulu+, Amazon, Vudu, etc, all add up to a less than 5% of total consumer spend (thanks for your Keynote covering some of these points Jon Cody).
I don't think there is any doubt that IP delivered video is going to continue its march to near global ubiquity (as predicted by one of the speakers), but I do believe that 2012-2015 will be marked by the striking back of the operators who will march over to the content creators in Hollywood with their StreamPix (Comcast's answer to Netflix) and Verizon/Redbox partnership (their answer) and demand the same mobile streaming rights that Netflix has for no additional charge since they are already paying millions and millions for their pay TV rights of the same content. I don't think Netflix with 20m subscribers at $15 a month can outspend Comcast with a similar subscriber base at $100 a month, and in the end, I think the big operators will either consolidate the OTT players or try to match their capabilities to do what they do best: raise ARPU and reduce churn. Consumers will win (they will get the video they want, when they want it), and the operators (OTT or otherwise) that continue to provide a great UX (user experience) for their consumers will survive (Apple is an easy prediction here).
Perhaps all of that sums up the quote I took away at the top of this blog, awarding the digital video future to those who build great consumer experiences while recognizing that those with deep pockets might make a few blunders and might move slowly, but that they will move and will flex their dollar-based muscles and ultimately will be providing their own Broadband TV services (across their own and other operator networks).