Video analytics purveyor Skytide has high hopes for over-the-top (OTT) video in 2013, predicting, among other things, that next year "may be the year when a commercially viable OTT model emerges that is equitable and sustainable for both content owners and ISPs and allows service providers to actually profit from their infrastructure investments."
That sounds like a big task for a business segment that has shown promise but never really delivered in the past, even though, as the analysis points out, "OTT video providers such as Netflix (Nasdaq: NFLX), Amazon.com (Nasdaq: AMZN) Prime and Hulu are estimated to generate $8.2 billion globally in 2012."
Skytide's "6 Online Video trends to Watch in 2013" report suggests the breakthrough will happen by the end of next year, when "more people will be watching OTT video than walled garden IPTV services often run by operators."
Part of the optimism is based on the belief that the rise of longer form OTT content "will also change the current dynamic," especially if that content is of sufficient quality to be shown and enjoyed on a new generation of high definition TVs and connected video devices.
The report also predicts that "[o]nline video traffic will continue to skyrocket… fueled by the proliferation of connected devices such as smartphones and tablet PCs, the rise of OTT video providers and their expanding content libraries and the migration of advertising dollars to online video."
Advertising dollars, in fact, also make the list, as Skytide predicts online video advertising "will really hit its stride."
These changes will not come without a price. The free ride on quality online video should end as long-form content attracts "new subscription revenue," the predictions continued. "[s]ubscription services will become more important. As consumers come to crave longer-form HD video content viewed anywhere, anytime, on any device, they will need to pay for it."
All of these changes will be fueled by improved technology such as the "embrace of Adaptive Streaming" to help control IP data consumption and transparent caching.
"With the rise of video viewing on tablet PCs and smartphones, the benefits of adaptive streaming really come to light," the predictions said.
- Skytide has released these online video predictions
Evolving OTT delivery launching an online video revolution
Accenture: About half of consumers watching OTT on TV
Survey: Most smart TVs will end up as dumb screens