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The Impact of OTT on the Walled Garden
With Google TV on the way, broadcasters and service providers alike are debating the value of the gatekeeper vs. the value of unfettered online access via the TV. We asked several industry leaders for their take on the challenge ahead.

Should the internet video experience be managed by the service provider or should the openness and consumer choice of the internet be transferred to the living room?

JL: If the service provider has given access to the OTT content via the internet via their supplied hardware, then they will have done this as a customer retention exercise, or because they have managed to find a way of generating additional revenue from some of the OTT content and services. In this case the service provider has the right to manage the experience as it's vital to limit the potential loss of revenue from their content. The internet video experience will be a part of the service providers offering and they will be held responsible by the consumer for the experience.

YC: Service providers need to bring openness and consumer choice of the internet to the living room. Service providers have various key assets in place including the consumer billing relationship as well as premium content. Adding the richness of the internet under their own brand and within their portal will ensure consumers won't go away to find what they are looking for.

(They also need to provide) unlimited access, as any restriction will lead to failure. Netgem client Telstra is an interesting example of this. This operator uses OTT technology and content to its subscribers' benefit. The T-Box developed by Netgem aggregates content from Telstra, from broadcasters and from the web, in a seamless manner. Users are not lost and can enjoy web TV content... on their TV rather than the PC. Telstra provides an enjoyable access to unlimited content and can legitimately charge for it.

DB: In line with IP Vision's approach to OTT, it needs to be a hybrid. Leaving the consumer without a single point of contact and quality of service for their viewing will only lead to confusion and frustration, but we no longer have to be as prescriptive as before. A user's preferences and contextual recommendations are an integral part of the flexibility that OTT and connected services provide. This advance does not signal the end of the service provider-it simply allows the service to be more personal and better tailored to the needs of the user.

SM: Integrating IP-delivered video with traditional TV broadcast has the potential to provide an enhanced consumer experience, and when managed by the service provider it maintains a strong QoS.

A connected TV platform that's completely open to the internet is probably too open-how people interact with a website on a PC is very different from how they interact with their TV. Some of this comes down to the lean forward/lean back interaction model, but it's also due to different expectations about platform performance, reliability, and the tools available for interaction. Many websites assume you have a mouse and keyboard, and there is no good way of offering this functionality on a TV at the moment.

SZ: The service provider is attempting to differentiate their proposition by guaranteeing a high QoS. However, there are different ways consumers view the quality of their video experience, and gauging quality of service includes choice.  Consumers have access to thousands of content sources on the web, not just 1,000 titles that can be accessed through a walled garden. I believe video services such as Apple, Google, and Hulu have stronger opportunities in this space. By providing a high level of choice these companies could dominate the business.

How much truly open OTT content might and should broadcasters allow?

JL: If broadcasters can truly embrace and offer a genuine home network solution to consumers, then it could be unlimited. The nature of home networking means that consumers can watch any content from any source, which gives consumers the opportunity to watch pay TV on the main TV, whilst others are watching free, paid, or stored content in other rooms in the home.

SZ: It's not a question of whether broadcasters should allow a certain level of content for use in OTT environments. They must provide unfettered access or risk losing control of their content on the web. Broadcasters are compelled to provide access to their content through OTT, mobile devices, and the STB. At the end of the day, it's a good thing for broadcasters to give consumers choices in how they access content.

YS: Ultimately, broadcasters should allow all of it. I say this under the assumption that the term ‘truly open' refers to paid content as well, which is accessible subject to payment. Once payment for content OTT becomes the norm ( and the CPMs fo video ads increases, although that alone is insufficient), broadband connectivity is available nearly everywhere, and the amount of user-friendly connected devices people possess is sufficient, there will not be a better way to deliver content to end users.

Obviously, there are many "ifs" here, but I truly believe this is inevitable. It is just a matter of time, and it will take some years before the regular user will have legal access to all of the content.

SM: Broadcast delivery of content will always have a place, simply because of scalability: It will remain the most cost-effective distribution mechanism for a long time to come. Until the economics of large-scale delivery of content over IP are resolved, CDN costs for OTT services will remain high. While OTT delivery increases the quantity of content available, a poor user experience reflects badly on the broadcaster. Despite that, OTT services offer a valuable route for broadcasters to increase access to their content and so broadcaster-driven OTT services will flourish. The success of other OTT services will largely depend on the quality of the content they can offer, since broadcasters will be very reluctant to allow any third-party content to be displayed on top of their broadcast programming.

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