Pay OTT subscription services will generate $32 billion in revenue worldwide in 2015, outstripping pay-per services that enable viewers to rent or purchase videos ad hoc, according to research from IMS Research, but telecompetitors will have their hands full keeping up with fast-growing OTT video demand.
Peak bandwidth utilization in 2010 was 44% of capacity and bandwidth usage per household is forecast to increase by more than 50% between 2010 and 2015, according to analysis and results produced by IMS Research’s Global Bandwidth Utilization Model.
“OTT video-capable devices are becoming ubiquitous, and within a few years all but the lowest-end televisions and Blu-ray players will include OTT video capabilities,” says Paul Erickson, analyst with IMS Research’s Consumer Electronics Group. “These new devices are forecast to supplant game consoles as the dominant OTT video client over the next few years.”
While telecompetitors’ networks in North America, Europe and Asia will be feeling the strain, networks in regions where broadband penetration is lower, such as Eastern Europe and Latin America, will be particularly pressured.
Recognizing the strain, telcos have generally avoided building out FTTH networks, deeming them to costly and time-consuming, and instead are pursuing quicker fixes to legacy infrastructure in order alleviate bandwidth constraints.
Seventy-five percent of IPTV households receive IPTV via ADSL connections, according to Kendall’s recent research.
“Reducing crosstalk across copper bonded pairs using the ITU-T G.vector standard (G.993.5), introducing software solutions to maximize network logistics, and using caching in the network are all solutions that are occurring right now, as telcos position themselves to meet the rapidly growing consumer OTT demand,” according to IMS. “Even further, many operators are looking at deploying local content delivery networks (CDN) to keep their traffic local, reducing costs of bandwidth transit.”
The message – all service providers, whether they provide video via IPTV or not, need to build and engineer their networks to accommodate the growing appetite for OTT video. DSL powered IPTV operators should pay particular attention, since IPTV services already eat up significant portions of bandwidth, leaving little to help meet the growing expectations for a good OTT experience. Plan accordingly.