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Study: Smaller Channels May Move to OTT Only

29 Jan, 2013 By: Chris Tribbey

For TV channels with small- or medium-sized audiences, switching to over-the-top (OTT) streaming services could prove more profitable than remaining on cable or satellite services, according to a new report from IHS Screen Digest.

The study looked at nearly 200 channels broadcast in the United Kingdom, and found 134 channels that could cut their costs considerably by going directly to OTT services, instead of paying satellite providers to carry them. IHS Screen Digest suggests these transitions could happen within five to10 years.

“For large consumption channels — i.e., channels with large audiences — the economics of OTT streaming remain highly unfavorable, with the cost in some cases hundreds of times greater than broadcast on satellite,” said Guy Bisson, research director for television at IHS. “However, for channels with a low to medium viewing share, scaling for OTT may not be such an issue.”

The OTT-only model would only work for channels in standard-definition, not in high-def, Bisson noted.

“Nonetheless, as television business models change and subscribers’ viewing habits evolve, there could be a gradual move among smaller SD channels to begin to investigate OTT unicast and multicast as a substitute for traditional broadcast during the next decade,” he said.

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