Ooyala report debunks OTT saturation, bashes ATSC 3.0

“The kinship – like it or not – that streamers and broadcasters share is at the core of this year’s report,” was not an opening gambit we expected upon opening up another State of the Broadcast Industry report from OTT video technology vendor Ooyala, and the surprise was followed by some interesting insights from a firm which has had to undergo its fair share of shape shifting in recent times.

Faultline Online Reporter doesn’t often see eye to eye with vendor-written reports, those often guilty of blatant propaganda and wince-inducing figure-twisting, so it was also a pleasant surprise to see Ooyala agree with a big statement we made in 2018 – debunking the myth of saturation in the streaming market. We’re not saying Ooyala is a vendor exempt from pushing reports with vested interests, just that this particular publication has some wits about it.

Ooyala has collated a number of research reports from 2018 to get its point across, namely Netflix’s Bird Box hitting 45 million accounts in its first week, while data from Pew Research Center shows 61% of 18 to 29 year olds now watch TV primarily on streaming devices. An industry first also occurred recently, with more US viewers purporting to find their newest favorite show on Netflix than any other specific outlet, at a swing of 32% to 26%, according to a report from Hub Research.

Within this Hub Research survey is the common question on availability of content which many in the industry continue to latch onto as a negative of the prevalence of streaming services, when in reality even signing up to a few offerings remains better value for money than paying big bucks for a traditional cable or satellite TV package. More than half of consumers declared there are “so many shows it’s hard to know where to start,” with 49% selecting this option compared to 42% in 2014. Ooyala strikes a valid point, stating that this is by no means a measure of saturation, but one of evolving discovery mechanisms used by younger audiences that eschew advertising.

“Bottom line: Subscription and ad-supported OTT services are steadily replacing traditional content delivery and there’s no end to the opportunity to create connections with a global audience. OTT is not traditional TV. It thrives upon consumer choice, often random interaction, the convenience of viewing when, where and on what device a consumer wants to use. It thrives upon its own ability to iterate to respond to the changing conditions of the new TV environment,” writes Ooyala.

The State of the Broadcast Industry report also drops in TDG research showing over 78% of the 128 million broadband homes in the US now subscribe to at least one of Netflix, Amazon Video or Hulu, while 8% take a virtual pay TV service like YouTube TV or DirecTV Now. Our only major criticism of the report would be its references to various pieces of research covering the very same topic, mainly OTT subscriber numbers and revenue forecasts, each with contrasting projections. Conveniently, our research arm Rethink TV is soon to come out with a refreshed SVoD forecast so we can make some comparisons pretty soon.

Eventually, the State of the Broadcast Industry report moves onto some actual technology, heralding how 5G rollouts starting this year will provide a pedestal for emerging technologies to thrive, while making an apologetic nod towards ATSC 3.0. Ooyala reckons 5G will trigger a new cord cutting epidemic as consumers cut fixed line broadband services for 5G alternatives, which will in turn give rise to long over-hyped VR and AR use cases.

This is a large and rather optimistic leap here from Ooyala. Granted, there are flattering forecasts like video will make up 90% of all 5G traffic, but this translating to automatic success for the VR market is not a given, and is a repetitive presumption we are tired of reading – for an industry which has repeatedly failed to deliver, even with $billions in funding. Yes, we’re referring to you, Magic Leap. Our point is that VR and AR use cases may well grow in the 5G era, but at a slog.

Ooyala has not been so kind regarding ATSC 3.0, the next-gen TV broadcast standard, expressing doubt that consumer electronics makers will get on board the initiative and start fitting ATSC 3.0 chipsets. The report cites theoretical televisionist and professor at Appalachian State University, Frank Aycock, stating, “It’s time to declare ATSC 3.0 dead on arrival. Just like Mobile DTV before it, ATSC 3.0 has not lived (and is not living) up to the hype that heralded its introduction to the 21st Century television audience.”

A damning sentiment, yet one our own coverage as 2018 progressed began to lean towards, feeding off an aura of increasing frustration in the industry.

In conclusion, “As cord cutting continues and Millennials and Gen Edge viewers continue to turn away from traditional TCV, more media companies are joining, rather than fighting, the push into OTT. As 5G wireless delivery takes hold over the next few years, viewers will

find an even better experience that provides jitter and buffer-free SVoD, AVoD and live sports.”

A difficult outro to disagree with, but one which lacks a bit of direction, which Ooyala should know all about given how the vendor has had to change its spots to survive shifting trends following the huge $500 million write-down by Australian parent company Telstra a year ago, and the vendor looks to be pulling it off in the face of adversity, for now.