Ott prefix. Ott-services left operators without billions. Legal policy and regulation

OTT (Over the Top) is a technology that delivers real-time media content over provider networks. If IPTV broadcasts video over a provider-controlled network, then OTT transmits a signal over an unmanaged Internet network directly from the content aggregator via the http protocol.

The benefits that an OTT user receives are the ability to continuously view, access to content from anywhere in the world with an Internet connection, and lack of control of the Internet provider. Content rights holders also benefit from the ability to protect their product and monetize viewing by guaranteeing access to certain devices (such as set-top boxes). Access control is carried out by the content management and encryption system. In addition, content owners have the opportunity to expand their audience, again because OTT technology is not tied to specific providers.

If we talk about the interactive features of OTT, then the following are the most popular:

1. Video on demand. Delivery of video content by order of a specific subscriber. Available on Youtube, RuTube, Netflux, IVI, etc.
2. Delayed viewing. Time shift function when watching a video, the ability to record for later viewing.
3. Pay TV over the Internet. Provided by services Planeta TV, Yes, Kartina TV.

OTT benefits

• OTT technology not tied to a specific provider, therefore, it is available anywhere in the world where there is Internet.
• High quality content, the ability to adapt to the speed of the Internet channel.
• Large selection of interactive services.
• The ability to watch videos on mobile devices.
• Any owner of media content can broadcast.

Today, OTT is considered a promising format for the supply of content and related services to consumers. Compared to cable or satellite TV, OTT and IPTV have only one drawback: using these technologies, videos can only be viewed on PCs or smartphones. However, this drawback can be easily corrected if you buy a Set Top Box, which adapts the video stream for viewing on a TV screen.

STB MAG-245 Micro can be considered a good example of such a set-top box - with its help you can not only enjoy comfortable viewing of IPTV or OTT video, but also watch photos from a flash drive of a camera or camcorder, listen to music and chat on social networks.

Now in Russia there is a lot of talk about import substitution. However, there is an area where the developments of Russian companies are not only ahead of foreign ones in the Russian market, but also competitive in the world. These are platforms for distributing video over the Internet.

Introduction
Of the well-known operator projects, the only example of using a foreign-made OTT platform is Mediaroom (now an Ericsson solution), which the Beeline operator uses to broadcast TV channels to devices for its Pay TV subscribers. All other large OTT projects use Russian-developed platforms. Megafon TV is built on the BCC solution, the multiscreen in MTS is based on the SPB TV solution, Rostelecom uses the SmartLabs platform for the Zabava project, and Er-Telecom chose the Sotal solution to launch the multiscreen.

Of course, Russian companies are more successful in part because they speak Russian and are close by. But, for example, Huawei, which is actively seeking to offer its OTT platform to Russian operators and has a very large support office in Moscow, also cannot boast of contracts yet.

Perhaps, the Russian OTT market is still at some special stage of development, for which foreign companies cannot find an approach. It is possible that ready-made platforms are not yet suitable for Russian companies, and foreign partners are not ready to provide the required level of customization. Let's try to see what kind of unique solutions Russian developers offer. And for this we will analyze what OTT platforms are.

Client-server part

Middleware

The basis of the OTT platform is a solution for managing content and user services, that is, what is usually called middleware in IPTV. MW defines client-server communication. The client is a video player in the browser or an application with a video player on the device. On the server side, MW processes client requests and opens access to services - TV channels, video on demand, etc. The main difference between the various OTT platforms is precisely how sophisticated service options their MW supports. For example, in the OTT platform, which was implemented by NGENIX for the Dozhd pay TV channel, viewers can only watch one TV channel by subscription, so the service management solution is quite simple. In the case of the IVI video service (the OTT platform is developed by the video service on its own), users can watch free content using an advertising model, and then the client video player plays ads in accordance with the user's profile. Or they can subscribe to a paid video, and then they do not need to show ads, but they need to give access to an additional library of paid content. This MW variant is more complex. Well, the most complex MWs are used in operator OTT services. For example, BCC offers not only packaging of TV channels, deferred viewing of TV programs, video on demand on a paid and free model, but also an assembly of thematic virtual TV channels from VOD.

When comparing and choosing between platforms, customers, of course, first of all look at the offered server functionality and compare it with their needs. In addition, client applications are an important aspect. This part also actually refers to client-server interaction, but for the convenience of presentation, we will single out it in a separate paragraph.

Client part

The user interface plays a key role in the success of the future service, so almost all companies that make applications for OTT platforms are very seriously engaged in its development. For example, SPB TV and SmartLabs have their own design departments. BCC purchased and adapted an interface built by NDS. But in some cases, the design is determined by the operator, for example, in the hybrid (satellite TV + Internet services) project MTS, CTI was engaged only in the implementation of applications, and the interface was developed by the marketing department of MTC. At the same time, CTI has its own proprietary interface, which the company offers to IPTV / OTT operators.

Sotal has a very interesting approach to creating user interfaces. In addition to the possibility of full deep customization of the interface as paid service, the company has a set of ready-made free solutions in which the client can insert his logo, change the color scheme or even rewrite the UI using open source code. The limitation is simple - since this interface is a free product, the operator who changes it must also provide everyone with access to the source code.

Not all platform manufacturers are in the business of applications; some order them from third-party developers. On the one hand, in this case, customization of applications and the player for the needs of the content provider can be a little slower. On the other hand, it will take a lot of resources to support applications for many devices, it may be more profitable to attract specialized companies. Usually a balance is sought between cost and startup speed.

Sometimes applications are ordered from several companies. For example, the Amediateka service is built on the SPB TV platform and for most devices uses applications developed by SPB TV. But the application for Smart TV "Amediateke" was made by another company, Nemo Group, which has its own OTT platform, but so far only for internal use.

There are a lot of technical subtleties in players and applications, since many functions are now shifted onto them. For example, applications handle access control at the authentication stage, while a video player is responsible for placing ads and collecting statistics. Therefore, in order for the video player to play the advertisements of the largest Russian sellers, it must be approved by these sellers. And, say, the company Tvigle, which also developed the OTT platform, believes that a certified video player is one of the advantages of its solution.

The ability to automatically download video ads from the largest sellers is a very useful option, but it is usually needed for video-on-demand services on the Internet. For operator services, OTT platforms offer to use a separate advertising module. For example, Sotal's solution allows an operator to promote their offerings - paid packages or video-on-demand - and place advertisements for local companies. SPB TV allows you to change advertisements on TV channels and target them in accordance with the information about the viewer. Such a module is deployed on the server side.

OTT platform = MW?

Due to the fact that the bulk of OTT and IPTV platforms perform the same functions, all Russian IPTV developers have also made OTT solutions. Accordingly, BCC, CTI, Netris, SmartLabs, Telebreeze have OTT platforms that allow launching complex services over the Internet. Conversely, companies that have developed OTT platforms are now offering their IPTV launch solutions. These are, for example, solutions from SPB TV, Microimpulse, INCO TV.

If a developer has an MW, he usually already says that he has an OTT platform, because other components can be integrated. The modern modular approach to development contributes to this. However, this does not mean that these other components are not very important. Video needs to be prepared and delivered, and delivery is more complex for OTT than broadcasting over managed networks.

Preparation and delivery of content to the viewer

After it became clear what content needs to be sent to the user, three interesting questions arise: where to get this content, how to prepare it, and how to deliver it to the client with maximum quality and minimum delay. Accordingly, the process of broadcasting over the Internet consists of three stages, the correct passage of which must be ensured.

The first stage is loading the content into the system: recording to the source servers in the case of video on demand; connection of broadcast servers to TV channel streams, if Internet sources are taken; creating your own streams, if the signal is taken from a satellite or from the air. Some OTT platforms also offer content: TV channel packages and video on demand. For example, SPB TV has content, Vidimax platform, CTI, Telebreeze solution, LifeStream, CDNVideo.

All content offers have their own characteristics in terms of building relationships with copyright holders. The extreme cases are the services "My TV" by SmartLabs, OTT / IPTV platform "Microimpulse", Proxima TV by "Inventos" and "Smotreshka" by LifeStream - where the OTT platform for launch by the operator requires only minimal customization of the player, and the technical part of the platform and content is already ready to launch a "virtual pay TV operator" on any broadband network.

The availability of content is interesting primarily for small broadband operators who would like to offer their subscribers video over the Internet, although it happens that large pay TV operators want to expand their video libraries through partnerships.

If we are talking about the purely technical side of loading content into the system, then different solutions also have their own peculiarities. For the client, it can be important, for example, speed - how long it takes from the moment the video file starts downloading to the moment it is shown to the viewer. As Tvigle told us, it is this aspect of their platform that attracts TV channels - the same Dozhd, which loads TV programs for broadcast after they go on air.

For some projects, OTT platforms have even built their own antenna posts, receive and recode TV channels from the satellite. This is how Telebreeze works, for example. And SPB TV is the only company that takes local versions of federal channels from the air.

Content preparation also includes cutting and recording a stream for time-lapse and network video recorder services, and preparation and loading of metadata about programs and films, although these modules may be separate. For example, Sotal has examples of integrating a deferred view module into an existing third-party solution.

In almost all cases, when video content is not taken in the form of links to the source server, its transcoding will be required - changing the codec, container or frame size.

Transcoding

Many companies that have developed their own OTT platforms have also developed their own transcoders. For many years, these developments have been carried out by the Russian companies Bradbury and Sotal, and their coders are also used in third-party projects (Elecard, the most famous Russian developer of coders, as far as we know, does not have an OTT platform, the Telebriz IPTV / OTT solution from him separated). Actually, these companies came to OTT platforms from the world of coders. In other cases, transcoding solutions are used for their own needs - for example, encoders for their OTT projects offer BCC and SPB TV. But if the client wants, third-party coders can be easily integrated into the OTT platform. Therefore, not only Russian, but also specialized foreign companies are represented in this area: Envivio, Elemental, Harmonic, RGB (now Imagine). But, as it seems to us, there is also a tendency to switch to Russian solutions or to open ffmpeg.

Of course, this became possible because the H.264 codec is almost always used for OTT video, the formats are mainly reduced to HLS and it is rarely required to encode video with maximum speed and efficiency, as for ordinary television, where it is still difficult to do without hardware encoders. In OTT, it is more important to configure device profiles and fit to real broadcast conditions, and this is convenient to do on your equipment.

After the video files or streams are ready, you need to deliver them to the subscriber with minimal losses. Since delivery takes place through other people's networks and the content provider does not have the ability to configure routers and use multicast to save traffic, you need to figure out how to organize delivery. The generally accepted approach is to use CDNs in conjunction with adaptive broadcast protocols.

There are two leading CDN companies in Russia - NGENIX and CDNVideo. Both companies offer, in addition to delivery, OTT platform services, albeit for those cases when a complex content management system is not required. For example, these platforms are great for launching the internet broadcast of a single TV or radio channel.

SPB TV has built its own private CDN network, and this network is also used in OTT projects launched by the company.

Other OTT platforms either offer connectivity to existing public CDN operators with which they have partnerships, or allow them to build their own network. BCC has a traffic balancing solution for the operator's CDN. Sotal offers operators to use their video servers to create CDNs. These solutions are very good for local markets. For example, if the main field of activity of a content provider is a specific region, and even not very well connected to the general Internet by backbone channels, then it is logical to build your own delivery network for this particular region.

To determine exactly where your content is viewed and with what quality it gets there, another component of the OTT platform helps - these are tools for collecting and analyzing statistics.

Statistics

OTT platforms collect two types of statistics: data on the quality of delivery (buffering time, packet loss, etc.) and data on consumed content (which channels and services and on which devices this particular user is watching).

Delivery monitoring

When a content provider builds an OTT platform for himself, he is the last to collect statistics. Therefore, often when asked how the delivery quality control works, video services answer that they collect user complaints. This approach works. However, OTT already has automated delivery control mechanisms, which are needed, for example, to draw conclusions about the need to spend money on connecting additional broadcasting points or changing the parameters for preparing video coding profiles. There are different methods for assessing the quality of delivery, sometimes quite complex, and there are special companies that develop them. As part of the OTT platform, almost all developers collect data from video players in real time - bit rate and buffer sizes in relation to the type of device and geographic location.

Content consumption statistics

The video player also transmits to the provider all information about the user's actions - the choice of content, viewing time, etc. There is actually too much of this data (the term Big Data is used for a reason), and the main problem here is not data collection, but analysis. The direction of analyzing user statistics is now developing very rapidly, because on this basis it is possible to organize optimal packaging, and flexible billing, and cross-promotion of services, and a recommendation system. OTT platforms are developing this direction, but so far real examples there is little use, unless, of course, take into account the simple collection of data on the popularity of TV channels in the package. For example, Inventos and SPB TV made their own recommendation solutions, while CTI, bundled with its own MW, offers a third-party recommendation service Impress TV, but clients do not use them yet. The Megafon TV service, built on the BCC platform, attracted Imhonet for the organization of recommendations, but has not yet launched the solution. Vidimax tests third-party solutions. Two manufacturers of OTT platforms, SmartLabs and Sotal, told us that they already use the collection of view statistics to create dynamic “storefronts” - user interfaces for specific services. The Sotal solution allows the operator to analyze the popularity of films and programs and, on this basis, plan showcases and make decisions about extending the delivery time.

DRM

DRM is the only component of the OTT platform that is not developed in-house. It is technically possible, but creating a solution for all devices and properly certifying it is very costly, only a few companies in the world have coped with this task. Note, however, that DRM is only required for the premium content of the VOD service. For TV channels and movies, there are different palliatives: AES encryption, personal links, checking access rights at the application level, etc. We wrote in great detail about content protection in OTT in the May issue of Tele-Sputnik, and we will not return to this now. When choosing an OTT platform, the service provider itself must decide whether to pay for DRM (or even for several) or whether simpler and cheaper solutions will suffice.

Choices and perspectives

In general, of course, the cost of the solution and the set of functions are the main points when choosing an OTT platform. The third important factor is startup speed. An increase in launch time leads to very large monetary losses from lost profits. Apparently, it is the need of Russian Internet broadcasters, on the one hand, for a customized solution, and on the other, for a quick launch, and so far leads to the fact that foreign solutions turn out to be uncompetitive.

The situation will probably change only when cloud solutions, designed not for large TV channels and broadband access operators, but for any content producers, of which there are more and more, will be in great demand. Both Russian and foreign developers are now working in this direction.

Few of the ITC industry specialists have not heard of OTT. In the last couple of years, this topic has worried the minds of both the TOPs of the largest national telecoms and broadcasters, and the owners of small regional providers and TV companies. They added "fuel to the fire" and "news from the fronts": the traditionally fast-moving markets of developed countries, where OTT services began their offensive several years ago, for the most part "reported" about the destruction of traditional value chains for the telecom and television markets, the need to develop fundamentally new strategy for telecom, cable TV and DTH operators and broadcasters.
Until recently, all conversations about the Ukrainian market were more theoretical than practical. And now the ice has broken. OTT services have appeared in Ukraine as well. Will the strategies of content providers, broadcasters and telecom operators change dramatically?

Service convergence

The world around is changing. Penetration of broadband access, the technology of integrating the Internet and digital interactive services into modern televisions (Smart TV or "Smart TV") and home receivers, the emergence and popularization of user "smart" devices (smartphones, tablets, etc.), optimization of compression and transmission technologies video data, as well as the development of Internet services, blur the boundaries between traditional television and the Internet. The interests of TV companies, telecoms, Internet and TV providers, content distributors and manufacturers of user devices are increasingly overlapping, forcing companies to actively develop and offer the market new services that were often uncharacteristic for it.
This movement is based on the convergence of traditional telecom and TV services, Internet services and multi-screen technology, the provision of which is not limited to the network of a particular operator, or OTT services - as it is now customary to call this process... Well, the engine of everything has traditionally been the consumer, whose desires
mobility and independence from place and time, fueled by the new functionality of consumer devices and spoiled by the limitless possibilities of the Internet, have long gone beyond the limited set of several services offered to him by the "linear" telecom and TV markets.

Fear of telecoms

A few years ago, European telecoms (both mobile and cable) faced a negative outlook for revenues from the provision of basic services in the long term (see Fig. 1, 2, 3):

• profitability from the provision of basic services (voice, SMS and data transmission) by mobile operators will decline by 2.4% per year. The main trends are a decrease in profitability by 30% for the entire period (from 2011 to 2015) from mobile calls without a decrease in consumed traffic due to price pressure from competitors, a stable decrease in income from SMS by 8% per year in the long term,
  smartphone penetration in 2015 will reach 95%;
• profitability from the provision of basic services (voice and data transmission) by fixed-line operators will decline by 3.4% per year. The main trends are the decline in profitability from fixed telephony by 10% per year due to the development of VoIP. The number of households with “super-fast broadband access” (over 24 Mbps) will increase from 3% to 16% of the total number of households in 2015;
• profitability from the provision of Pay TV services will grow by 5.7% per year. The main trends are an increase in the number of households using Pay TV services from 52% in 2011 to 58% in 2015. ARPU growth - 2% per year.

Both mobile and cable operators received an encouraging positive outlook for data revenue growth from analysts in view of a significant increase in the number of smartphones and, as a result, mobile traffic consumed, as well as a significant increase in the number of broadband households. However, the expected growth in data revenue will not offset the decline in voice revenue.

Analysts also talk about the increased risk exposure of such traditional telecom services as "phone calls" and "messaging": three quarters of the total number of calls made by subscribers and sent SMS in the foreseeable future can be replaced by cheaper and functional IP counterparts:

Faced with a negative outlook for core core revenue, telecom operators are desperately looking for opportunities to diversify their businesses. And many players began to view the provision of various video services as an opportunity. According to research, the role and popularization of services such as HDTV, VOD and PVR will grow from year to year.

However, improving its networks in order to meet the growing demand for Internet access and the transition to full-fledged broadband access, sufficient to start providing OTT video services, the operator (primarily mobile) exposes its traditional services to additional risks (the so-called “cannibalism services "on the part of" telco-OTT "): under the pressure of Internet services, SMS services can very quickly disappear altogether, and voice telephony, especially one based on large margins, will also actively begin to be replaced by cheaper alternative IP services. And despite the positive dynamics of growth in revenue from data transmission, without the search for and implementation of additional OTT services by the operator itself, it risks turning from a service provider into a regular Internet service provider in the future. However, abandoning development and focusing on the provision of traditional services can lead to complete surrender in the competition.

Threat to television

Of all the ways of consuming media, television is still in the first place, with about 95% of viewers watching it, but the youth audience of television is declining. Over the past 5 years, the average length of daily television viewing has decreased by 10 minutes per year. And the subscriber today is not at all the same as he was 5 years ago. His habits and interests have changed. New devices and services have appeared. Young people and middle-aged people began to spend less time in front of the TV, giving preference to a computer, smartphone, tablet, which have Internet access.
While traditional television remains strong, audience fragmentation is growing every year and new screens are gaining attention. Broadcasters and TV providers have to pay more and more attention to multiscreen technology.
Data provided by Arthur D. Little suggests that only 17% of the US population under the age of 25 uses only TV to watch TV, and about 30% of young people watch almost all TV content over the Internet. And their number will increase every year. For comparison: among the entire US population, 36% only watch
TV, and only 13% usually use the World Wide Web to search for TV content. And if traditional linear broadcasters do not take appropriate measures, they could lose an entire generation of viewers.
Google research shows that IP-enabled user devices are used unevenly and in different ways throughout the day, which will certainly affect the workload of the OTT provider's broadcast complex and operator networks as OTT develops and becomes popular:

• PC usage peaks during business hours on weekdays with a gradual decrease in activity in the evening;
• the use of smartphones is stable throughout the day, regardless of the day of the week;
• tablets are mainly used on weekday evenings and weekends.

Thus, every year broadcasters are increasingly dominated by the need for a presence on the World Wide Web and providing multi-screen access. On the other hand, OTT opens up prospects for the media and film industries of direct access to the end subscriber, to where the exit was previously closed for them.

Services and monetization

Leading Western analysts, in particular Clemens Schwaiger, Head of Digital Media Strategies at Arthur D. Little, and Dean Bubley, Founder of Disruptive Analysis, who recently visited Kiev to participate in the first OTT International Conference -services: great opportunities or a real threat? ”, suggest not limiting the understanding of OTT only to video streaming of TV channels. In their opinion, the evolution of the entire complex of processes and services included in the concept of "OTT service", i.e. beyond the network of a particular operator, should be considered through the prism of its two main components:

• OTT video;
• telco-OTT.

Business organization based on OTT video is driving force technology, since it is video content that is associated with monetization. The annual growth in demand for video over the Internet, with the correct adaptation of the business model, should become the main source of additional income for all players involved in the content production and delivery chain. The various variations of the OTT services offered by the world's largest players now existing in the world boil down to the provision of two different services: linear broadcast of TV channels over the Internet (Live streams and Catch up TV, the model of provision is akin to IPTV, only without being tied to a specific operator's network) and providing access to TV content (VOD).
OTT is evolving more organically than IPTV. According to the research company Informa Telecoms & Media, in 2013 the number of users of OTT services will be equal in number to IPTV, and already in 2015 their number will differ by half - 380 million versus 163 million.
Also in 2012, a significant event took place for the film industry (see Fig. 4): in the United States and Western Europe, online movie consumption (VOD + SVOD) for the first time in quantitative terms exceeded sales on physical media (DVD + Blu-ray). However, the average price of VOD is several times less than the cost of DVD (occupying half of the market in quantitative terms, OTT provides only slightly more than 10% of its turnover in America and slightly less than 20% in Western Europe), which allows experts to once again recall the "cannibalism" of technologies and the gradual replacement of less flexible, but more profitable traditional ways sales of video content with new OTT services.

The monetization of the business models used relies on three components, which are often used in various combinations:

• advertising model. Free access to content, and the monetization of the OTT service is achieved by attracting advertising money, primarily by broadcasting video ads during playback;
• subscription (SVOD, subscription VOD). Provides a fee for accessing available content for a specified period;
• pay-per-view (TVOD, transactional VOD). It is an online alternative to the DVD and Blu-ray segment in the content monetization ecosystem (in many countries, including the USA, the TVOD + SVOD model is used, see Fig. 5).

At the end of 2012, analysts from Informa Telecoms & Media estimated the volume of the global OTT video market at $ 10.6 billion (see Fig. 6). According to the forecast, in 5 years it will more than triple and in 2017 will exceed $ 37 billion, which will correspond to approximately 10% of the total global video services market.

Distribution of profitability of business models at the moment: advertising accounts for 50%, content sales account for 14%, and subscriptions for the remaining 35%. Over time, this distribution will not undergo significant changes: the share of the advertising model will rise to 55% by 2015, however, over time, activity in the field of OTT telecoms will positively affect the subscription model, which will allow to return to the current percentage by 2017. Analysts expect the distribution of revenue streams to be similar to that of traditional Pay TV services today.

At the moment, the US accounts for about three-quarters of the total OTT video market. By 2017, this share will be reduced to 60% due to rapid market growth in Western and Eastern Europe, as well as in Asia. Thus, analysts predict that over 5 years (from 2012 to 2017), revenues from the OTT service in Eastern Europe will increase 12 times from $ 95 million to $ 1.174 billion (see Fig. 7).

Telco-OTT, the arrival of which in operators' networks with the transition to broadband access is difficult to avoid, unlike OTT video, promises telecommunications companies only threats to their conservative businesses. Instant messaging over the Internet, as well as VoIP and mVoIP technologies, threaten the traditional sources of income for telecoms - SMS and voice communications. For example, the Omani mobile operator Nawras, after switching to LTE, reported on "evaporation" in 2012 of $ 43 million for SMS due to the WhatsApp service. Another example - about 25% of all international calls are on Skype. Not wanting to lose their income, some telecoms, primarily mobile ones, with varying degrees of success begin to block OTT services in their networks (according to data provided by Venturateam, the number of mobile operators blocking OTT services in their networks almost doubled in 2012 - up to 10.5% compared to 5.4% in 2011) and lobby for the adoption of legislative restrictions at the level of their countries (the usual wording in such cases sounds like “a threat information security"). However, such "military actions", although they allow for some time to save part of the income, but threaten the competitiveness of the operator's business itself. As well as postponing its development, such as the transition to LTE.
Another way is cooperation instead of "war". There are already many examples on the market when OTT providers and telecoms join forces for mutual benefit. Meanwhile, according to Venturateam, only 16% of mobile operators believe their revenues will benefit from OTT.

Threats and opportunities

OTT has significant disruptive potential, and all players in the telecom and media value chain now have to consider and weigh various options for how to do business.
Both traditional and new players, actively developing their business and providing new services, will rapidly conquer new markets and territories, thereby significantly changing the existing ecosystem of the television and film industry. For example, content producers are moving towards multinational licensing and the organization of their own technical distribution platforms. FTA TV channels are striving to move to new platforms and develop new revenue models. Pay TV operators are developing new and unique technical means delivery of content and access to new devices. Internet players are striving for the availability of their software on new platforms and devices, with an emphasis on better content aggregation. Telecoms are trying to expand and use the capabilities of their networks in order to provide access to better quality TV services. Cable operators focus on bundling TV channels and organizing their own OTT services. Consumer device manufacturers are striving for IP compatibility and VAS service integration.
On the global market in the OTT segment, one can increasingly observe various kinds of associations in order to provide services. According to analysts, the most effective in the OTT segment is work in the framework of partnerships: telecoms + content providers. Studies show that such associations are usually 30-40% more effective than individual projects, and are also able to provide a more diversified and high-quality service.

Legal policy and regulation

According to Nokia Siemens estimates, the profitability of OTT providers for 2010-2015. will increase by 40%, while the profitability of network operators is steadily declining. The latter, of course, are not very happy about this prospect.
The services provided by OTT providers are not tied to the network over which they are provided. At the same time, Internet content, unlike broadcasting and telecommunications, is practically not subject to any significant national regulatory oversight. This gives pay TV operators a reason to complain that they are deliberately placed in unequal conditions with OTT providers, since the former are subject to strict regulation, while the latter are not.
Therefore, the convergence of services and their provision on any device through any network increasingly leads to the intersection of interests of previously separate industries: telecommunications and audiovisual. Since OTT providers can operate outside borders, the only way to regulate them is international agreements... However, in many countries the regulatory framework has not yet fully adapted to market changes. Most governments are very careful about regulating these industries. And they prefer to spend more time on research and analysis, without changing anything in the legislative plan, instead of making a hasty decision.
In addition, there are two opposite opinions on what this regulation should be. The first of them is based on the idea of ​​"free access" and market relations between operators and providers of OTT services. The second is strict regulation of services and mutual settlements. Nevertheless, the ideas of liberalization have been more and more prevalent all over the world lately. And some countries at the legislative level have already adopted it as a basis in their regulatory documents(Singapore, Australia and New Zealand).

Technologies and solutions

On March 22, Kiev hosted the first International Conference "OTT Services: Great Opportunities or a Real Threat?" A wide program of reports, participation in the event of the world's leading experts in the field of convergence of telecommunications and video services allow us to speak of the conference as the largest Ukrainian event in the field of OTT. A lot of attention at the conference was devoted to technologies and solutions for OTT services.

Benny Norling, general manager for business development in the countries of Scandinavia, Central and Eastern Europe, the CIS of the SES company spoke in detail about the SAT-IP communication protocol, which radically changes the philosophy of satellite reception, providing it with flexibility previously unavailable:

• multiscreen: content is available on multiple devices;
• multiroom: content is available in different rooms.

The technology makes the received DVB-S / S2 signal available via an IP network on all devices in the house capable of broadcasting a TV signal: smartphones, tablets, laptops, PCs, etc. The first generation of devices based on the SAT-IP protocol, which appeared at the end of last summer, could provide simultaneous reception over an IP network of four satellite channels (both SD and HD, as well as, in the future, Ultra-HD) on four different devices.
Thus, SAT-IP made four out of one set-top box. Already in June this year, the presentation of the first receivers is expected, capable of transmitting 8 channels to 8 different devices.
According to Mr. Norling, SAT-IP technology should be the best link between satellite and OTT. The combination of OTT and SAT-IP could be the perfect combination the viewer is looking for. It is better to use the Internet for such services as Catch-Up ("following the broadcast"), VoD, etc. If the viewer wants to watch high-definition television without possible interruptions, then this is only satellite TV.
SAT-IP was originally designed to receive a non-coded satellite signal (FTA) and then transmit it over any home IP infrastructure with or without cable. Therefore, the technology has received the greatest distribution at the moment in Germany. Mr. Norling also suggested that solutions based on this protocol will soon become popular in Ukraine.
There is no solution for coded channels yet. At the moment, negotiations are ongoing with the leading European operators of pay satellite TV, but no final decision none of them has been accepted yet. Mr Norling assured that there will be a solution for Pay TV operators, but it is not yet available. It will also imply the availability of 4 or 8 channels on different devices. But it is too early to talk about the timing of the launch of any ready-made solution on the market.
And most importantly, SAT-IP is not a specification for any specific product. It is an open standard that any developer can use. Ready-made solutions SES offers to test it free of charge, after which it will be possible to put the SAT-IP logo on the product. We have already written in more detail about the SAT-IP technology in the May issue of Mediasat for this year (pp. 10-14).

He spoke about the use of OTT technologies for the implementation of legitimate business models for the provision of interactive video services. Andrey Rasseikin, Deputy Head commercial department Department of Interactive TV, CJSC Business Computer Center (BCC). The speaker noted that his company has been working on the interactive TV market in Russia for a long time, and at the moment it is ready to offer its technologies and solutions on the Ukrainian market.
According to the speaker, modern market conditions force telecom operators to constantly participate in the race, offering the subscriber more and more content and services. You can, of course, be content with what you have, but in the end you will have to admit defeat to your competitors. Therefore, a modern operator plans to grow by providing the widest possible coverage of subscribers with promising services and services, while optimizing both capital and operating costs for technological infrastructure.
Interactive TV can become such a promising service. It can work wherever there is the Internet, and provide a wide range of content, including unique ones. Numerous studies also support the close integration of TV and the Internet.
The ability to have access to television services not only on TV, but also from other devices, will partially return the subscriber to watching TV, as well as increase his loyalty, which leads to an increase in ARPU and subscriber life in the operator's network. Therefore, when introducing a service to the market, it is necessary to focus on all types of devices.
When implementing a project today, the principle should be taken into account - services on all networks and on all devices. And OTT can help with this. This is the most versatile interactive TV technology at the moment, which allows you to provide services on managed and external networks at any point where there is Internet: on STB, mobile devices and Smart-TV without the need for repeated investments in infrastructure. Anyone can use it - operator, content provider or internet service.

OTT allows you to be more flexible thanks to:

• access to open networks;
• additional services on internal networks;
• entering foreign markets (with or without geo-blocking);
• Internet TV.

New technologies such as Smart TV and broadcasting to all kinds of devices are developing a new culture of television viewing, shaping the future of TV, I am sure Larisa Makarovskaya, Regional Sales Director of Conax AS, speaking on "Conax Xtend Multiscreen for OTT Services".
The cable operator today has a wide choice for organizing the provision of additional video services to its consumers. The question rests on the cost of implementation and, of course, the choice of an effective (profitable) business model.
Video consumption over the Internet is growing at the fastest pace now. However, interactive TV is not yet profitable (with the exception of a number of services in the US). In most countries (and Ukraine is no exception), many legal aspects of the use of rights to video content on the Internet have not been resolved.
On the other hand, last year in Russia IPTV growth was 38%. On the App store and Google play there are already dozens of apps for VOD and Live-TV. This is reality and this is just the beginning. Connecting to the Internet is a real revolution for TV, says Ms. Makarovskaya.

The new rules of the game have changed the expectations of the viewer, who today want:

• TV on all devices;
• safe and efficient payment methods;
• reliable and stable service;
• easy access to content;
• complete control over personal TV consumption.

And the operator who satisfies 100% of the consumer's needs will ultimately win the competitive race. In this, new OTT technologies will come to his service, which will allow:

• reduce subscriber churn (by providing advanced services as part of premium packages, as well as additional services that increase the connection to the operator);
• increase ARPU (due to VOD, Catch-up, nPVR and connecting additional devices for an additional fee, as well as a higher bandwidth of the Internet connection due to the use of OTT, which will increase income from Internet services);
• attract new subscribers (due to the service going beyond the network, as well as connecting other types of devices, except for traditional TVs).

When introducing new technologies, the most difficult task is to ensure the security of OTT services. It consists in finding the right balance between control over the content (the desire of the copyright holders) and the convenience of using it everywhere on any device (the desire of the client).
Conax Xtend Multiscreen, a fully-fledged pre-integrated ecosystem that takes only three months to deploy, has been created to help TV operators looking to upgrade to next-generation services.

He told about new challenges for companies broadcasting video over the Internet Andrey Guryanov, Regional Sales Director for EMEA at Elemental Technologies. In his opinion, no one is interested in IPTV in the form in which it is understood now. The subscriber wants to receive services not only at a convenient time, but also anywhere on the chosen device. As a result, the requirements for the content format (adaptive bitrate) and distributed CDN are:

• lower bit rate with high quality encoding;
• support for various profiles to cover all available devices (iOS, MS, Android);
• high performance and coding density;
• sufficient flexibility with scalability of the solution;
• reliability and resiliency;
• monitoring and control;
• all types of content (Live, TSTV, VOD) for a reasonable price.

In the future, we are waiting for: lower bitrate (due to the use of more efficient codecs, such as HEVC / H.265) and faster Internet (organic development of technologies and growth of broadband access penetration), which, of course, will have a positive effect on the popularization of technologies such as IPTV and OTT. But the size of the transmitted video does not get smaller. The diagonal of TVs is becoming more and more, which requires an increase in screen resolution, and this, in turn, entails an increase in the quality of the transmitted TV signal, which will bring additional difficulties to operators of interactive TV. These include the increase in the number of HD channels, and in the future - the transition to 4K. Therefore, the evolution of compression and the transition to HEVC / H.265 is no longer viewed as an optimization, but as a necessity.
H.265 requires 3 to 5 times more processing power than the previous generation codec. According to Mr. Guryanov, Elemental's optimized CPU / GPU platform will help solve this problem by providing the bandwidth required for H.265.

Andrey Silanchev, director of business development in Russia and the CIS at Irdeto, also spoke about the advantages of multi-screen and flexible access. In his opinion, a well-formed OTT solution should have the following properties:

• studio-grade protection to prevent abuse of premium content;
• have tools for flexible management and content monetization based on the company's business models;
• deliver content to any device over any network, while respecting all license rights.

The popularity of multi-screen solutions is growing rapidly around the world. New OTT players are trying to conquer the market with its help, and existing operators, in turn, began to act quickly, investing in multiscreen solutions to prevent threats from new OTT players and possible user churn.
At the beginning of 2013, more than 250 million flat-panel TVs have already been sold around the world, and 40% of them are Connected TV, and by the end of the year it will already be 50%. Thus, Connected TV is becoming a serious platform for OTT.
Broadband is also the engine of OTT services. The larger the bandwidth and the larger the number of devices on the market, the more new possibilities. However, it also increases competition from OTT newbies and pirates, and creates complexity and cost in implementing desired business models, rights, process control, etc. All these factors make it possible to talk about an avalanche-like growth in the popularity of OTT services.
Actually, the main purpose of this report was to talk about the Irdeto Broadband solution, which allows the operator to remain competitive by increasing brand value and monetizing digital assets by offering multi-screen video services.

Ukrainian OTT market

OTT service is a new concept for the Ukrainian market. In view of the underdevelopment of mobile broadband access in our country, the OTT video service is focused exclusively on access through the networks of cable operators. However, the widespread use of smartphones and tablets in the country already obliges it to be multi-screen.
Four national legal players have formed in Ukraine (having agreements with copyright holders for the distributed video content) - Divan.tv, Volia (Volia Smart HD), Oll.tv and Megogo.net. Services Divan.tv and Volya are primarily focused on providing linear broadcast of TV channels. Oll.tv and Megogo.net are mainly focused on providing video-on-demand.

Of course, Ukrainians have access to videos from the world's largest container providers, such as YouTube. If desired, the Ukrainian subscriber can use the services of a dozen "gray" Russian OTT services. They do not officially develop their business in Ukraine, but the Ukrainians have the opportunity to get access to their services. In addition, there are widely represented "illegal immigrants" (who do not have agreements with copyright holders), who, according to the official OTT players, significantly squander the Ukrainian market both in terms of money and quality.

All Ukrainian platforms are developing in two directions - B2C and B2B. In order to be as accessible to the user as possible, Ukrainian OTT services try to be present on all devices from which the user can watch them by connecting to broadband access. First of all, these are Smart-TVs and interactive set-top boxes. Access via smartphones and tablets is also important. In addition, Volia is going to bring a hybrid set-top box to the market in the near future, where it will be able to accumulate additional services for users. Foreign practice suggests that ARPU from such subscribers rises by an average of 30%.

The appearance of a TV broadcasting OTT service from Volya should stimulate the process of integrating OTT services in the networks of Ukrainian Internet providers. According to market participants, both national and small telecom operators will have to decide in the near future with which of the two content providers (Divan.tv or Volia) cooperation is more profitable. For an Internet provider, the integration of the OTT service will mean expanding the services offered to subscribers and increasing competitiveness without the need to negotiate with copyright holders and additional investments in technology. And the percentage of OTT subscribers offered to telecom operators under the revenue sharing scheme should stimulate their desire in a positive direction. It will be more difficult to come to an agreement with those who already provide a Pay TV service in their networks, since the OTT service poses a serious threat to their business. But even in this case, there are great prospects for partnership, especially with small regional networks, whose opportunities to negotiate with copyright holders are much less than those of large players on a national scale.

For an OTT provider, cooperation with Internet providers provides a guaranteed bitrate for OTT services in partner networks. In addition, the joint billing service for Internet and OTT services greatly facilitates access to the end user.

Cooperation with Internet providers is also interesting for two other Ukrainian OTT players (Oll.tv and Megogo.net). Such cooperation
is one of the key links in the subscription and pay-per-view monetization models. For Oll.tv, an additional incentive to seek cooperation is also looking for opportunities to improve the quality of live football matches.

At the moment, the competition is not so much between services as with “illegal immigrants”. And improving the quality of services provided by OTT operators (thanks to technologies and partnership agreements) is one of the ways to compete. Most people who subscribe to the OTT service of this or that provider display it on TV screens via Smart-TV or specialized set-top boxes. The real value of an OTT service for an ordinary person lies in how easily and simply he can watch the desired video content on his TV screen and how satisfied he will be with the quality of this service. And he will be ready to pay for this convenience. After all, in order to bring an “illegal” service to TV screens, it is necessary to carry out a whole procedure of “dancing with a tambourine”, and even if successful, no one will be able to guarantee the quality of the provided content.

Also, one of the most difficult issues for the Ukrainian market is the issue of content rights and prices. Here the model, which is used by majors with cinemas (for a percentage of sales), is not suitable. For their films, the owners want a certain amount, and the amount, I must say, is far from small for the Ukrainian market. Recently, the world's leading majors and distributors of TV content have become more accommodating and flexible in terms of granting rights to broadcast on the Internet, which was not even mentioned a couple of years ago. But legal video content is still expensive, and the Ukrainian viewer, spoiled by the availability of pirated content, is not yet morally ready to pay an adequate price for it. In this difficult situation, Ukrainian OTT players have to constantly maneuver between the opportunities and desires of viewers and the need to monetize their investments.

Each of the players has his own vision of how to solve this problem. But, as the heads of national OTT services admit, reaching the break-even point is not expected earlier than in two or three years.

PrevTrack

1 1 Andrey Metelsky, head of the OTT project, Volia company

We are the largest Pay TV operator in the country. The introduction of a new OTT service is a logical step in our development. We are the first cable operator in the region and one of the few in the world who presents content not only to viewers of our network, but also outside of it. Now there are about 130 TV channels in three thematic packages, over time their number will increase. Access outside our network means that all our clients need to get OTT service is broadband from 2 Mbps for SD content and 4 Mbps for HD content.
With the help of partners, we provide subscribers with access to films. This is not only Megogo.net and Oll.tv, but others as well. First of all - content owners, for example Sony, with whom we already work on linear TV channels.
In the near future, we will introduce hybrid set-top-boxes, with the help of which both existing subscribers in our network and new ones outside it will receive additional opportunities. First of all, it is YouTube navigation on TV screens. Over the course of the year, new interactive services such as Cutch Up will appear, with the help of which it will be possible to watch the past TV programs within a week or two. The Multiscreen technology will enable the transfer of content from TV to a smartphone. The potential for this service is enormous. We have a plan for the development of technology for 2-3 years ahead.

About copyright holders

As far as television rights are concerned, this is not an easy and very important question. Linear channels have different conditions not only on the way of broadcasting, but also on which device is received. These conditions are different for copyright holders, and a very large part of our work was to understand all the legal nuances of each copyright holder and competently negotiate with them.

OTT has been a project for several years. It takes at least a year to come to an agreement with all copyright holders, as well as invest millions of dollars to implement this technically. It makes no sense for medium and small providers to do this. It is not acceptable for them to make huge investments that will not pay off in two or three years.
On the other hand, you can take global technologies with all the rights from an OTT provider and offer your customers additional opportunities. Over the years, we have developed quite close and mutually beneficial relationships with many companies. Even before the launch of our service, we noticed interest in OTT from other Internet providers. The first client is Datagroup.

Regulatory issues

There is the Law of Ukraine, according to which any organization providing a software service must have a license for this type of activity. It is normal when the services provided to the public should be regulated by the state. This will ensure the quality of the services provided. As for new technologies, there should be no discrimination in relation to this or that technology. In fact, the law does not say anything about technology. It says about the regulation of the type of activity. Accordingly, the requirements should be the same for everyone, and the conditions for the provision of services should also be the same.
The National Council should clearly formulate its requirements, while there should not be any understatements. At the moment, we are waiting for the National Council to tell us about the OTT technology.

1. Andrey Metelsky, head of the OTT-project of the company "Volia"

2 2 Andrey Kolodyuk, founder of Divan.tv

Divan.tv is a Ukrainian company, one of the pioneers of the Ukrainian OTT market. We use our entire technological solution with a simple goal - to convey to our clients about 150 Ukrainian and foreign TV channels. We also work with films for which we conclude direct contracts with copyright holders. We use both an advertising model and a subscription. We cooperate with retail chains, network operators and vendors.

About copyright holders

Our viewers on one account for the same money can watch content both on TV and on mobile devices. But there is a problem here. The rights for TV content that are sold “for televisions” are different from pure OTT rights for the so-called on-line. Some of our Ukrainian channels still cannot clear their rights to Internet broadcasts.
The price for TV content is determined for each subscriber in the subscription. In addition, we note the ever-growing demand for the use of the so-called "constructor", when each subscriber independently forms his own viewing grid. However, many copyright holders are very opposed to such a model, as they want large packages for which they will receive guaranteed money. Although the world has already formed certain OTT rules, when TV channels are paid for the actual viewing of their content by subscribers, however, unfortunately, this logic of the game is not yet accepted significant number TV channels presented in Ukraine, which, in my opinion, greatly slows down the development of our market. The distributor wants to get their money here and now. But this is contrary to the interests of the consumer, who wants here and now what he wants and on what he wants. Therefore, the concept of large packages is no longer relevant, but in Ukraine it is still the only possible one.
As for the VOD market, conditionally Ukrainian consumers can be divided into two categories. Those who are ready to watch ads for a free service, and those who are willing to pay not to watch ads. But today, 70% of the film distribution market is made up of Hollywood majors who don't want to give away their premium content to an ad model. It is important for the end consumer to understand that the most requested content will not be free. This will be a subscription or pay-per-view. Another question - for what money?

Cooperation with Internet providers

We offer the market a working business model based on the revenue sharing scheme popular in the West. In cooperation between a content provider and a telecom, each is responsible for his own questions. We take care of all the issues of the legality of the rights to content, and the Internet provider is responsible for the quality of the network it serves, and especially the resolution of the “last mile” quality issue. Broadcasting quality content requires a certain guaranteed bit rate throughout the entire network.
It is not important for people why the service does not work or does not work well. It is important for him that he works. And only in close cooperation with the Internet provider can we guarantee the provision of high-quality and legal OTT content.
All payment for the Internet remains with the provider. Payment for our content (there are different schemes, the user can transfer money to us or pay in a general check to the Internet provider) monthly, and while the client is with this provider, we will pay the provider a certain percentage. Its value depends on the number of subscribers, etc. Those. every month we pay the service provider a portion of the money we receive for content from a subscriber in his network.
A year ago, we drew the attention of telecommunications market players to the fact that the model, in which a content provider works in close cooperation with a telecom operator, is the most effective at the moment in the world market. After all, firstly, VOD is not affordable for any regional telecom player. This is a game not even of a national, but of a supranational scale. Secondly, why should a telecom fight and pay big money for technologies and rights to content, if in cooperation with an OTT provider, without additional investments in technology and content, without investing a dime in rights, it can legally create a competitive market for the market offer and retain the loyalty of its subscribers by providing them with additional service. And while still making money. We are already working on this model with more than 15 operators.
We have only one problem in this regard - piracy. It's no secret that many of our Internet providers offer Internet access in a bundle with IPTV, without paying a dime for the rights to broadcast content. Another question is that they do not earn a dime on this by providing access to TV for free. We offer them more money on this. It's all about the mentality of some players who can consider the issue of legal broadcasting only after a visit to them by the police. But this mentality is slowly changing.

About competition

With the advent of the service from Volya, we have formed two OTT offers for Internet providers. On the one hand, this is Divan.TV, and on the other, Volia, Oll.tv and Megogo.net, which offer some kind of joint service. This is good for the market. Now he had a choice. I think that the market will get excited and in the near future it will be divided into those who will work with Divan.tv or Volia. The main advantage of our service is that we are not an Internet provider, so we have no conflict of interest with them. Everyone will choose what is closer to him. There are certain risks both in working with Divan.tv and in working with Volya.
Therefore, we can talk about the beginning of competition in the OTT market in Ukraine. But this plays into our hands, since together we can create a legal market.

Regulatory issues

My opinion is very simple. The National Council is in charge of regulating TV services in our country, and it must formulate clear rules of the game. However, today the presence or absence of a license does not in any way limit the "pirates" in the provision of illegal services. We are ready to receive the license when it is available, and we will do it second, after YouTube. This is our clear position.

About monetization

There is money on the market, and there is considerable money. So, last year, Ukrainians left $ 100 million in cinemas, and this is not counting popcorn and Coca-Cola. This means that people are willing to pay for quality content.
Another question is why they do not leave them on the Internet yet. People are willing to pay a certain amount for access to quality content at home, but this money is now settling with the "pirates". For example, in many of our villages "kart-sharing" is developed with a monthly subscription.
In addition, when people realize that the money will go to their favorite heroes, this moment of awareness should persuade them not to use pirated services, but to pay for legal ones. This tendency is outlined now in the world and, I hope, will soon come to Ukraine.

2.Andrey Kolodyuk, founder of Divan.tv

3 3 Evgeny Abramov, director of Oll.tv

Oll.tv is a classic VOD service. We provide our services both by advertising model and by subscription to films. We also provide a fee for each view. We showcase a fairly wide range of films and feature several major majors such as Sony and Miramax. Also, starting from Euro 2012, we broadcast the main football events live.

About copyright holders

The break-even point is expected to be reached within 3-4 years. This is due to the high price of content, since licensing rights are very, very expensive. The model of content distribution on the market depends on the conditions and prices for rights. We launch some of them according to the advertising model. There is some content that we only buy for a subscription, as most of the world's leading majors are extremely reluctant to sell the rights to the advertising model and require any user fees to be charged. And in another way, these rights cannot be acquired and are unlikely to succeed in the near future. And the third type of rights that can be purchased is the rights to premiere films, which can be sold on TVOD only for each viewing. We also have this kind of rights. As a rule, the rights are initially sold on TVOD (this allows you to charge a fee only for viewing), then on SVOD (content is distributed by subscription), and only then it is possible to distribute using an advertising model.
Now in the global rights market there is a clear understanding of this movement, which was facilitated by the world's leading OTT services. The largest copyright holders have a clear and transparent grid, and they quite clearly understand how much it can cost.
However, the Ukrainian market does not yet have a clear time frame, and the rules of the game are still completely dependent on the copyright holders. There are a number of companies that open access for us as early as 2 weeks after the premiere. First of all, this applies to Russian content. In most cases, this period is calculated one to two months after the premiere.
Thus, the main and only problem in our business is the need for a fairly significant investment in rights.

Cooperation with Internet providers

Our company works in two directions: both in the B2C market and with Internet providers. The main paths of our development are integration with a large number of devices (Smart-TVs, interactive set-top boxes, Apple mobile devices, etc.) and contracts with providers. For example, we also participate in the integrated service of the Volia company.
Internet providers with the help of additional services can offer new services and attract new subscribers. We also place our caching equipment on the partners' site in order to facilitate the provision of services on the network of this or that partner. Therefore, there are practically no difficulties in negotiation issues. The difficulty arises when integrating billing into a partner's service, which is carried out so that the user has the opportunity to pay for our services through a single check for the Internet. This makes it much easier for us to enter the service.

About monetization

We are not going to take the last money from users. Our subscription now costs 40 UAH. If we start from the value of rights, then these are incomparable amounts. Based on marketing research and expert opinions, we have every reason to believe that the amount we charge for a subscription is not unbearable for users. In addition, we work with many providers according to a scheme that allows them to embed our subscription into their tariff plan, which also contributes to monetization.
The main problem is “illegal players”. Therefore, we believe that the market should develop in the direction of some kind of legalization. We consider ourselves completely legal and offer our services for the amount that we consider acceptable at the moment.

3. Evgeny Abramov, director of Oll.tv

4 4 Vladimir Borovik, CEO of the Megogo.net project

We launched in November 2011. The leitmotif was presence on any device. Our main concentration is cinema releases and serials from the CIS countries. We work in 15 countries of the former CIS and give part of the content to the whole world. The maximum number of unique users per month is 21 million, of which 5-6 million are from Ukraine.
In Ukraine, Russia, Belarus and Kazakhstan, we are developing the OTT advertising model more. And we focus on subscription and pay-per-view in the Baltics, where we rely more on partnerships with telecommunications operators. These are more civilized markets where DVDs are on the shelves en masse and people still buy them. They still haven't had a period of massive content depreciation, and people there understand that everything in life is paid, including watching a movie. Of course, there is also some kind of illegal market there, but there is no our scale.
Speaking about the rest of the countries (Moldova, Central Asia and the Caucasus), the markets there are still underdeveloped, and people still need to get accustomed to online, which is likely to happen in the next year or two.
On the territory of the former USSR, we try to buy all three types of rights in order to be as flexible as possible in the provision of our services.

About copyright holders

The issue of acquiring rights became the main issue for us when we, as a Ukrainian company, began to develop in 15 countries of the former USSR. In 2010, at the Cannes Film Festival, we approached many majors with the words “sell the rights to Ukraine”. In response, we heard "Ukraine - is it somewhere in Russia not far from the Urals?" As a result, it turned out to be expedient for us to buy rights to a wider and more understandable territory of the former USSR for the copyright holder.
The project is now in a very deep investment stage. We invest a lot of money in rights. And, I think that we will reach operating break-even within 2-3 years and hardly earlier, because the rights are very expensive. And for an OTT service, you need a lot of them. It is easier for TV channels in this regard. After all, if you are making a TV channel, then you need to fill in a certain broadcasting grid. If you are creating an OTT service, then ideally you need to reach not only all devices, but also offer the user as much content as possible, as your viewer expects this from you. It's like some unattainable maximum, to which you are constantly moving, spending a lot of money on it.
Those OTT services that present videos on a licensed basis have a long-term perspective on the market, but this is a very expensive pleasure. In dollars, this is a figure with at least 7 zeros.
In addition, we also had to write a separate system for managing rights, since the video content of different majors not only differs in availability in a certain area. Many rights are also sold for a specific period.

Cooperation with Internet providers

Of course, money in this market is generated in partnership. This is confirmed by the example of our cooperation with the OTT service "Volia". We see several more promising partners for us. But for now, I'm not ready to talk about the distribution of the revenue sharing budget.
In addition, according to the vast majority of contracts, all our future income, which we are talking about and do not really see yet, we will be obliged to share in half with the copyright holder.
Of all Ukrainian OTT platforms, the issue of cooperation with telecommunications companies interests us least of all. We are certainly glad to receive any partnership proposals. There are many people in the market who want to do joint business from Megogo.net. However, the advertising model, which we are mainly developing in Ukraine, least of all needs joint billing.

About monetization

We expect to take money everywhere. First of all, these are advertising budgets that will follow the audience. We also count on user monetization. We had a period of unregulated market, but we hope that together we will be able to put things in order. We have presented all three monetization models. But, as already mentioned, in Ukraine we are mainly developing an advertising model.

4. Vladimir Borovik, CEO of the Megogo.net project

PrevTrack

OTT Over the Top. What it is?

The business model of interactive digital television based on OTT technology offers real-time viewing of audio and video content from content aggregators without the participation and control of ISP providers.
Over the Top (OTT) is a technology in which content is delivered to any user connected to the Internet directly, via the http protocol.
OTT services provide uninterrupted viewing for the viewer and content protection for the provider. At the same time, the OTT service provider guarantees support for a certain list of subscriber devices (STB, set-top boxes), which gives him the full right to monetize it (according to an advertising model, by subscription or by entering a pay-per-view).

Among the most popular and successfully selling interactive OTT features, it is worth noting Video on Demand (VoD), Time Shift, Pay TV over the Internet (Web TV), broadcasting content to mobile devices (multi screen) and recording programs for deferred viewing. (PVR).

What OTT looks like in practice

OTT Video On Demand service is offered by Youtube, Netflix, Hulu. The advertising model and subscription to bundled services are applied here.

The OTT service specializing in Pay TV over the Internet is provided by Yes, Kartina TV, Planeta TV.

The OTT service for broadcasting content to mobile devices is offered by Sky Go, BBC iPlayer, Yes, Cristal.

From the point of view of both the operator and the end-user, OTT has significant advantages over IPTV. First of all, the fact that this type of content transmission is not tied to one specific operator.
OTT services are available to any Internet user, no matter where he is.

Broadcasting in OTT is capable not only of an IPTV or OTT operator with direct access to subscriber accounts, but also of almost any content owner.

In this case, the simplest and most proven way to get on the screen to the viewer is available: the copyright holder must integrate access to his content into the interface of a popular, widespread and having real technical support subscriber device.

OTT vs IPTV

The advantages of online TV, be it IPTV or OTT over traditional broadcasting, are obvious: the ability to choose what, when, and in what quality to watch. As for the choice between these two technologies, the choice is not so obvious. The main advantage of IPTV over OTT is a streamlined quality control system. In contrast to the bitrate reduction algorithm typical for the transmission of media content in OTT, the use of an intelligent delivery priority system for IPTV broadcasting is more acceptable for a demanding client. However, given the high cost of equipment for IPTV broadcasts, most providers consider the implementation of this service more like an image solution, therefore the range and quality of services can only develop in parallel with the material and technical base of the provider.

OTT is less demanding on hardware and software, therefore, its development is limited, for the most part, by the speed of subscriber access to the network. The viewer audience is not limited to one provider, unlike IPTV, and you do not need to install additional software with unique settings to view it, since you only need a web browser to view it. The adaptive content transmission algorithm allows using an access channel of less than 4 Mbps (when compressing video content using the H.264 codec, the minimum speed is 2 Mbps). At lower speeds it is possible to use download followed by viewing. This flexibility of traffic delivery algorithms significantly distinguishes OTT over IPTV.

As for the advantages of these two technologies, we can safely say that OTT is the undoubted leader, judging by the convenience and availability for the end user. As already mentioned, OTT is not tied to any of the specific operators, and is available anywhere in the world where there is Internet access. High quality content, plus the ability to view on mobile devices, adaptive bitrate (technology that adapts to the specific speed of the Internet channel), and a wide range of interactive services - all this distinguishes OTT from IPTV. Broadcasting can be carried out not only by an operator with access to subscriber accounts, but also by any owner of media content. In order to be able to sell content to the viewer, the copyright holder must take care of integrating the content access system into the subscriber device. In Ukraine, the most advanced alternative to such devices is the Aura HD media player. The main advantages of this device are support for all major media formats and codecs, and moreover, the device is accompanied by lifelong technical support: software updates, functionality expansion, and a list of supported services.

As for the disadvantages of OTT technology, it should be noted that the content is delivered over an unmanaged network. This means that the content owner has no control over the bandwidth of the subscriber. Consequently, the video can slow down during buffering times and be of poor quality. However, this problem can be solved. Since the main task of the operator is to provide the user with a continuous media stream, without delays and slowdowns, the bitrate of the stream must adapt to the speed of the Internet connection. Thus, the subscriber receives a continuous broadcast, the quality of which changes at each separate moment when the connection speed rises or falls. This principle avoids buffering and associated image delays, ensuring optimal image quality. However, it is worth noting that image quality can deteriorate, albeit briefly and only slightly. And, even in spite of this drawback, OTT technology can be considered the best way to deliver media services to the user, and increase the loyalty of subscribers, especially those who cannot afford a high-speed Internet connection, or use outdated technology.

A common drawback of both technologies is associated with the inconvenience of watching broadcasts. Mobility and interactivity make IPTV and OTT ideal for viewing on a computer screen, tablet or smartphone, however, for full viewing on a TV screen, the user will need either a set-top-box.

Perspectives

The main problem in the provision of OTT services is considered to be the implementation of user subscriptions, and, judging by the latest trends in the development of this segment of the TV market, this will lead to the fact that, most likely, the advertising model will become the main way of OTT monetization. And taking into account the growth rate of the spread of OTT technology, it is becoming more and more attractive in the eyes of advertisers, and OTT advertising may, in the near future, reach the same volume of impressions as television. Plus, this will open up additional opportunities for subscribers: with an advertising subscription model, users will have access to a wide range of high-quality content, which will only play into the hands of operators and providers.

A high-quality subscriber device will put a big point in the IPTV vs OTT dispute. Having at home the aforementioned Internet media player AuraHD, or an analogue, a person is unlikely to make a choice in favor of IPTV if he already has access to free content. And, according to the intricacies of marketing, primary trust between the client and the service provider is much more important than making a profit, which, with a sufficient level of trust, is only a matter of time.

In metaphorical terms, IPTV can be compared to an unscrupulous taxi driver who drives a client in a circle for a long time, and then takes him to the road. OTT, in turn, is a guide that explains that the right address is just two steps away. From this point of view, OTT is an incredibly promising and convenient way to develop and monetize quality media content services. Moreover, it is convenient for both providers and users. The advantages of this technology include the ability to broadcast to many types of devices, be it a digital TV receiver (STB), iPad, or a smartphone, directly to the user, bypassing intermediaries. The wide range of devices is explained by the ease of integration and management. Moreover, content can be reliably protected from copying, and the efficiency of technology can provide cost-effective maintenance of network and other resources. Users, in addition to a wide variety of receiving devices, will also appreciate a high degree of interactivity and a user-friendly interface that will help not to get confused in the lists of TV channels and video archives. In general, we can safely say that OTT is considered the main direction of the development of media services, which dictates new rules for the market, business, and the development of tastes, expectations and preferences of users.

According to research by US marketers, the consumption of OTT services has been steadily growing over the past few years. Even though the launch of detailed services is not always beneficial for providers, the trend dictates its own rules, and they have to adapt to new rules and trends. Unified services that combine the convenience and interactivity of OTT are gradually taking over the media services market. Among them are Amazon.com, Apple, BlockBuster, Comsat, Disney, BBC (I-Player), Google / Youtube, Hulu, Miicrosoft, Netflix, Sony (OTT Service), TiVo, Yahoo, etc. In Ukraine, this is oll. tv, MEGOGO.NET, Divan.tv, and others.

Unfortunately, not all modern TVs are able to correctly perceive video and audio codecs, which are used to encode an OTT stream. So, our specialists noticed that Panasonic TVs lack the necessary codecs for decoding audio tracks, Samsung TVs, H series and below, and do not support a video stream with some codecs at all. All these problems have been explored technicians company SmartTV and therefore we use two types of OTT stream encoding for our users.

This allows us to provide high-quality Internet OTT television services to customers with outdated smart TVs, as well as low Internet speeds, and, accordingly, to subscribers with MAG, Aura, Dune HD, U2C, Smart TV set-top boxes of the latest models and with high Internet speed.

• provision of encrypted channels with the ability to legally record individual programs on subscriber devices of users, including by subscription;
• transcoding of content (channels and films) into various formats for viewing on a computer, TV and mobile phone;
• provision of content on demand with the ability to view online and download to a subscriber device for further viewing.

This concept allows you to use content more efficiently, attract new subscribers and increase business profitability through differentiation of services and the introduction of online sales.

A feature of the implementation of OTT services is the ability to provide a service to any Internet user.

Problems

• Video and audio content must be available wherever the Internet is available. HTTP should be used as the transport protocol for all types of content;
• Also, HTTP should be used to provide broadcast television and video on demand services;
• The open Internet is, by definition, an "unmanaged" network in which the bandwidth to the end user is out of control. As a result, streaming video is of poor quality and occasionally slows down for buffering, which negatively affects the user experience of the service. This issue is of particular importance for mobile networks;
• The proposed technologies should be adapted to use the full range of subscriber devices (PCs with web browsers, set-top boxes (STB) / TV, mobile phones etc.). This means that they must be economical (have a small consumption of system resources) and easy to install;
• The ease of integration with the existing ecosystem plays a huge role, since most of the content is currently distributed using various formats and protocols (codecs, DRM, etc.).

Monetization models

There are various ways of organizing a business in the market. Some players offer content for free (Hulu), focusing on advertising, some operators focus on, some on iSTB (internet-Set-Top-Box). There are quite unusual models when the exchange of DVDs is combined with online viewing (Netflix). Typically, these services work by subscription. According to Informa Telecoms & Media classification en monetization models on the basis of which OTT providers work can be conditionally divided into three categories:

• Linear broadcast of programs ( linear programming) - broadcasting TV channels via the Internet (sometimes this type of content broadcasting is called Web TV). In this case, OTT providers most often receive income from providing users with access to channels (a model similar to that used by satellite, cable and IP TV operators)
• Model TVoD (transactional VoD)- includes pay-per-view for each individual content, the so-called pay-per-view ( PPV - pay-per-view). In the case of a purchase of content, it can be given for so-called temporary use (for example, Apple TV offers subscribers the following purchase restrictions: you can start watching within 30 days after purchase, if you have already started watching, then 24 hours before (in the USA; in other countries - over 48) users must finish browsing).
• Model SVoD (subscription VoD)- includes the ability to access for a certain period (day or month) to all content from the catalog of the OTT provider.

In addition to the above models, a model in which OTT providers provide free access to their content (usually in format) is now becoming widespread in the market. Monetization of the OTT service is achieved by broadcasting video advertisements during the playback of content. This model is often referred to as AVoD (advertising VoD).

Western market

Informa Telecoms & Media, a leading analyst firm in the telecommunications and media markets, highlighted the growing interest of IPTV operators in OTT in one of its 2010 forecasts. This is also true for content providers who have been uniquely positioned to sell their content directly to the viewer. According to Informa Telecoms & Media, in 2012 the global OTT market amounted to $ 10.6 billion. In 2012, the largest volume of income for operators comes from payments for viewed content, while according to forecasts of analysts of Informa Telecoms & Media, monetization of services through subscription to content will develop most dynamically, with a compound annual growth rate (CAGR) of 32%. Similar estimates are given by the Multimedia Research Group (MRG), whose report says OTT sales will exceed $ 11 billion in 2012. Analysts predict that by 2017 the total volume of the OTT market will triple compared to 2012, reaching $ 32.7 billion. Of this amount, revenue from advertising will make 49%, from the sale of content - 14%, from subscriptions - 37%.

Thus, most analysts predict significant growth in this pay TV sector in the next 1-3 years. Already, OTT services are provided by such companies as Amazon.com, Inc., Apple Inc. , Blockbuster Inc., Comcast (Fancast), Disney, BBC (I-Player) (PC only so far), Google / YouTube, Hulu, Microsoft Corporation, Netflix, Inc. (Online Video Service), Sonic Solutions (CinemaNow), Sony (OTT Service), TiVo Inc., VUDU Inc. (ISTB + Service), Yahoo! Inc. (Video Service).

Russian market

Several dozen players work on the Russian OTT market. They can be conditionally divided into TV equipment manufacturers, independent companies and large media companies that monetize access to their own content through OTT). Large telecommunications companies, in particular Rostelecom, Megafon, Beeline and MTS, also operate on the market.

On the Russian market, there are OTT services operating on a hybrid monetization scheme ( SVoD and AVoD), offering free ad insertion content and premium subscription content.

The largest OTT services:

• IVI.ru
• Megogo.net
• MOYO.TV
• Peers.TV
• intv.ru
• nexttvnet.ru
• Telepark.TV

see also

Write a review on the "OTT" article

Notes (edit)

Links

• (Internet Magazine on Broadband and Multimedia Technologies)
• / COMNEWS, POINT OF VIEW, 03/18/2013
• / COMNEWS, NEWS, 28.03.2013
• / Rossiyskaya Gazeta, 15.07.2014

Excerpt from OTT

Then bolts were needed to the doors of a new building, certainly of the style that the prince himself invented. Then the binding box had to be ordered for storing the will.
The giving of orders to Alpatych lasted more than two hours. The prince did not let him go. He sat down, thought, and, closing his eyes, dozed off. Alpatych stirred.
- Well, go, go; if anything is needed, I will send it.
Alpatych left. The prince went back to the bureau, glancing into it, touched his papers with his hand, locked it again and sat down at the table to write a letter to the governor.
It was already late when he got up and sealed the letter. He wanted to sleep, but he knew that he would not fall asleep and that the worst thoughts come to him in bed. He called Tikhon and went with him through the rooms to tell him where to make the bed for that night. He walked around trying on every corner.
Everywhere he felt ill, but worst of all was the usual sofa in the study. This sofa was terrible to him, probably because of the heavy thoughts that he changed his mind while lying on it. Nowhere was it good, but still the best was the corner in the sofa at the piano: he had never slept here before.
Tikhon brought a bed with the waiter and began to set them up.
- Not so, not so! - Shouted the prince and himself moved a quarter further from the corner, and then again closer.
“Well, at last I changed everything, now I’ll rest,” thought the prince and left Tikhon to undress himself.
Frowning in annoyance at the efforts that had to be done to take off his caftan and pantaloons, the prince undressed, sat down heavily on the bed and seemed to ponder, looking contemptuously at his yellow, withered legs. He did not think, but he hesitated before the labor ahead of him to raise these legs and move on the bed. “Oh, how hard it is! Oh, if only as soon as possible, these labors ended as soon as possible, and you would let me go! He thought. He made, pursing his lips, for the twentieth time this effort and lay down. But as soon as he lay down, suddenly the whole bed evenly went under him back and forth, as if breathing heavily and pushing. This happened to him almost every night. He opened his eyes that had been closed.
- No rest, damned! - he grumbled with anger at someone. “Yes, yes, there was also something important, something very important I saved for myself in bed for the night. Gate valves? No, he said about it. No, there was something in the living room. Princess Marya was lying. Desalles something - this fool - said. I don’t remember something in my pocket ”.
- Tishka! What were you talking about at dinner?
- About the prince, Mikhail ...
- Shut up, shut up. - The prince slapped his hand on the table. - Yes! I know, a letter from Prince Andrew. Princess Marya read. Desalles said something about Vitebsk. Now I’ll read it.
He ordered to take a letter out of his pocket and move a table with lemonade and a wax candle to the bed and, putting on his glasses, began to read. It was only then in the stillness of the night, in the dim light from under the green cap, that, after reading the letter, for the first time, for a moment, understood its meaning.
“The French are in Vitebsk, after four crossings they can be at Smolensk; maybe they're already there. "
- Tishka! - Tikhon jumped up. - No, don't, don't! He shouted.
He hid the letter under the candlestick and closed his eyes. And he saw the Danube, the bright afternoon, the reeds, the Russian camp, and he enters, he, a young general, without a single wrinkle on his face, cheerful, cheerful, ruddy, into Potemkin's painted tent, and a burning feeling of envy for his favorite, just as strong, as then, worries him. And he recalls all the words that were said then at the first meeting with Potemkin. And he imagines, with yellowness in a fat face, a short, fat woman - mother empress, her smiles, words when she, for the first time, kindly received him, and recalls her own face on the hearse and that collision with Zubov, which was then with her coffin for the right to come to her hand.
"Oh, rather, rather return to that time, and so that everything now ends as soon as possible, as soon as possible, so that they leave me alone!"

Bald Gory, the estate of Prince Nikolai Andreich Bolkonsky, was located sixty miles from Smolensk, behind it, and three miles from the Moscow road.
On the same evening, as the prince was giving orders to Alpatych, Desal, demanding a meeting from Princess Marya, told her that since the prince was not completely healthy and did not take any measures for his safety, and from the letter of Prince Andrei it is clear that his stay in Bald Mountains unsafe, he respectfully advises her to write a letter with Alpatych to the head of the province in Smolensk with a request to notify her of the state of affairs and the degree of danger that Bald Mountains are exposed to. Desalles wrote a letter to the governor for Princess Marya, which she signed, and this letter was given to Alpatych with the order to submit it to the governor and, in case of danger, return as soon as possible.
Having received all the orders, Alpatych, escorted by his family, in a white downy hat (a prince's gift), with a stick, just like the prince, went out to sit in a leather wagon, pledged by a trio of well-fed Savras.
The bell was tied up, and the bells were covered with pieces of paper. The prince did not allow anyone in Bald Hills to ride with a bell. But Alpatych loved bells and bells on a long journey. The courtiers of Alpatych, the Zemsky, the clerk, the cook - black, white, two old women, a Cossack boy, coachmen and various courtyards saw him off.
The daughter put down chintz pillows behind her back and under him. The old sister-in-law secretly slipped in the bundle. One of the coachmen put him on the arm.
- Well, well, woman's fees! Women, women! - puffing, Alpatych spoke rapidly, exactly as the prince spoke, and sat down in the wagon. Having given the last orders about the work of the Zemsky, and in this he did not imitate the prince, Alpatych took off his hat from his bald head and crossed himself three times.
- You, if that ... you come back, Yakov Alpatych; For Christ's sake, have pity on us, ”his wife shouted to him, hinting at rumors of war and the enemy.
“Women, women, women’s fees,” Alpatych said to himself and drove off, looking around the fields, where with yellowed rye, where with thick, still green oats, where there were still black ones who were just starting to double. Alpatych rode, admiring the rare harvest of spring crops this year, looking closely at the strips of rye sings, on which they began to grow in some places, and made his own economic considerations about sowing and harvesting and whether some princely order had not been forgotten.
Having fed him twice on the road, by the evening of August 4, Alpatych arrived in the city.
On the way, Alpatych met and overtook the convoys and troops. Approaching Smolensk, he heard distant shots, but these sounds did not strike him. Most of all, he was struck by the fact that, approaching Smolensk, he saw a beautiful field of oats, which some soldiers apparently mowed for feed and on which they camped; this circumstance struck Alpatych, but he soon forgot it, thinking about his business.
All the interests of Alpatych's life for more than thirty years have been limited by one will of the prince, and he never left this circle. Everything that did not concern the execution of the orders of the prince, not only did not interest him, but did not exist for Alpatych.
Alpatych, having arrived in the evening of August 4th in Smolensk, stopped behind the Dnieper, in the Gachensky suburb, at an inn, at the caretaker Ferapontov, with whom he had been in the habit of staying for thirty years. Ferapontov twelve years ago, with light hand Alpatych, having bought a grove from the prince, began to trade and now had a house, an inn and a flour shop in the province. Ferapontov was a fat, black, red, forty-year-old man, with thick lips, with a thick bump in his nose, the same bumps over black, frowning eyebrows and a thick belly.