Will OTT rise to uncompetitive levels?
A recent report by IHSScreen Digest predicts reveals that the costs of OTT will rise to uncompetitive levels when they need to be scaled up to broadcast volume levels: the reasoning being that traditional broadcasting is delivered via multicasting and that OTT is delivered via unicasting. That is wrong. First of all, only linear content can be distributed via multicasting: VOD, trick play, replay TV, delay TV etc: all relies on unicasting delivery, whether it is delivered as a traditional cable or IPTV service or as OTT services.
The reality is that most OTT content actually is not linear content anyway. The reality is that with the industries’ move to new HTTP adaptive streaming technologies, they lose the ability to do multicasting.
Consumers need to accept that when their consumption patterns change, this could impact infrastructure scaling and could impact costs. Yes, linear television is cheap to deliver, but people want VOD and are willing to pay.
The reality is that proper CDNs mimic multicasting by relaying live streams via strategically placed edge devices, dramatically offloading unicast streams on the Web, internet exchanges, peers and backbones.
The reality is that networks do not have infinite bandwidth and routers have no infinite capacity to scale multicasts. Proper CDNs do a pretty well job in scaling this capacity.
One challenge in this industry is that more and more content is consumed on-demand, and that implies unicasting: whether the content is delivered via traditional cable or IPTV platforms or via OTT services.