It’s no surprise that there’s a lot on the horizon for the over-the-top (OTT) media services – media streaming services offered directly to viewers via the Internet, like Netflix, Disney+, Hulu, HBO Max, and countless others. These companies were already reaching massive heights – the industry was valued at $110.1 billion in 2018 – and are now witnessing expedited growth due to increased entertainment-at-home as a result of the COVID-19 pandemic. By 2026, the OTT market is expected to generate $438.5 billion in revenue.
Many companies are capitalising on consumers’ hunger for streaming – half of Americans increased video streaming by 50% during quarantine – rolling out new streaming services altogether or adding onto those already on the market. Disney+ became a shining example of seizing the market at its best, doubling its subscribers to the 50 million mark in April after launching in Europe and the UK amidst the throes of lockdowns, a milestone which took Netflix seven years to reach.
Despite the uptick in streaming, there is of course a ceiling for how many OTT services can be successful. People will never have the time or money to subscribe to all that’s available. To predict which services will win out, 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, they need IT infrastructure and strategies that can accommodate these rapidly changing demands and manage their exponentially increasing data creation and consumption at scale.
While a quality viewing experience and distribution are not necessarily as glamorous as content, these factors influence whether or not subscribers cancel after their trial or stick with a service long-term. For OTT services striving to edge out competitors, the proper IT infrastructure can be the path to both superior quality and distribution – and generate cost savings that can help keep prices reasonable for the end-user.
Nail the networks
This year HBO, already known for its top-notch content, launched HBO Max to expand its overall breadth. But an increase in content volume and users requires even stronger IT infrastructure and connectivity to deliver theatre-quality content wherever users are streaming from.
Some OTT services will look to utilise public cloud providers to build their content distribution infrastructure, reaping the benefits of speed and scaling. However virtually all of the largest OTT platforms utilise their own infrastructure for reasons of control, quality of experience and cost. Connectivity is a critical element here. When it comes to connectivity, flexibility is key. Service providers can optimize network performance by colocating in a dense connectivity hub, interconnecting network traffic flows through access to a variety of ISPs, carriers, CDNs, and internet exchanges at global points of business presence. This creates centres of data exchange that will scale the business by connecting to as many users as possible.
With a menu of connectivity possibilities, your service is more resilient, switching between whichever network can provide the strongest connection. As a result, services can consistently provide the cinematic experience that users expect, whether streaming from a TV or mobile device. The wide variety also lets you to pick the most cost-effective option, bringing down your connectivity costs which could contribute to a more attractive end-user subscription fee.
Live near the streamers
Apple is a good example of a company that is honing in on price, with plans to roll out Apple One this fall, which will bundle several of its services, including TV, music, gaming and more, all for $6 a month. Delivering such a robust suite of content at scale requires IT infrastructure with access to low-latency routes to massive user bases.
Leveraging colocation centres at global points of presence maximises market potential, placing you as close to as many thriving consumer hubs as possible and even taking you the extra mile via important interconnection hubs. By distributing your IT environment across important regions, you can deploy, connect and host critical data infrastructure in proximity to users, networks, clouds. As a result, you can access low-latency, reliable connections that reach consumers quickly and at lower costs.
It seems like the sky is the limit for OTT streaming services – but not everyone gets to reach that high. As the market continues to grow it’s important for these companies to take advantage of as many competitive edges as possible to rise to the top.
Learn more about what colocation can do for digital media services, here.