OTT (Over The Top)...... is just the start of a new era

"If you want to look at the future... Look at your kids......."

Pretty strange words from me this time. Well, someone reminded me yesterday in my office that I also run a blog of technology and technical talks. But for some days or may be a lot of months I was suffering from a writer's block. I know it used to happen generally to authors of fiction but sometimes it really happens to part time bloggers like me. I was not getting an exciting topic to write about in simple words. A complication that can be made simple for others has always been my goal but then I was seeing a lot of confusion rather than complication and thus decided to stay out of it. Now that the air is clear and thanks to some children that I am in touch with including my 10 year old daughter understanding the changes that our industry, telecommunication demands has become simpler. 

So we come to the point. OTT or Over the Top, why did I select this topic for discussion. Well because there are various reasons for this and these reasons are listed below. 

1. We are seeing a heavy demand of video and interactive content and this is not a downloaded content but a streaming content. 
2. The concept of WiW WiW WiW which means (What I Want, Where I Want, When I Want) is on the rise. 
3. People are tired of seeing the same old type of broadcast censored content on the Television and want to see a more mature and "in" content and in much more clarity. 
4. Internet penetration has increased and now people have become content hungry and want to spend more and more time on the Internet to watch new things. 

The consequence of all these new wants led to the rise of a new star, a new entity in the telecom market, which is not regulated, which is cheap and which demands a lot of bandwidth; OTT or Over the Top. 

Netflix, Hotstar, Amazon Prime, VIU, ALT, Adda and many more applications with our very own Youtube is a classical example of OTT. 

And this brings to seeing our future through our kids. All my daughters' friends do not watch TV. In-fact I do not remember them watching TV for the last six or seven months that I have continuously monitored them. I have tried to note their behaviors and watching patterns. Boys and Girls both. They are all into watching content on their personal devices. Entertainment has become more of a personal preference than a family affair and this has given a rise to the concept of OTT.  

But the biggest question is are we as telecom engineers and the industry at large ready to answer the needs of our future? Are we really going in the direction which has been clearly indicated by our future generation? The answer, well is a yes and a no both. Yes because we are being more innovative and fast. We took 10 years to go from 1G to 2G, 5 years to go from 2G to 3G, 2 Years to go from 3G to 4G and while 4G is still baking in the oven we are starting to talk about 5G already. So the development graph has been exponential nevertheless. No because we are not addressing some of the core fundamentals of this business which is resulting into huge CAPEX flows for the Operator without any substantial return. 

Difference in the Business Model:

Operators need to know one thing very clearly over here, their domination over the services is no more autonomous. When we talk about voice an operator owns the circuit and also controls the customer. A voice customer is an asset of the operator as he/she is actually the content without the copyright for the operator and previously was the cash cow of the operator. However now the game has changed. Customers with this new entity and more Data - Centric entities in the foray are looking for more Data oriented services. 

The problem with Data is that it is repetitive at times, it belongs to some other entity with copyrights and demands variable bandwidth portions most of which is much higher that what voice demands. Setting up the infrastructure to enable high bandwidth data oriented services is very high as compared to voice however the end price that the customer expects is really very less. So the question is how an operator can make money in this business? 

The answer is fairly simple. The operator has to consider itself as a content service carrier rather than a service provider. This business model is not new. In-fact it is a very old business model, a legacy one which was started by our very own Door-Darshan (The national television channel of India). The service to the customer is free of cost but the revenue is earned from the content and the advertisements that come  in the channel. 

In the very case of OTT also the operator needs to know that major money is being minted by the OTT player who has just put a content server somewhere physically or in the cloud and is using the multi million dollar infrastructure of the operator to make billions of dollars for its own. It is but fair that the operator demands his pound of flesh from these OTT players. An operator ought to negotiate terms like advertisement revenue share or advertisement placement in the webpage or app that is being distributed by it. This would potentially be the other earning opportunity for the operator and thus can make a lot of money for it. 

So the rule is simple. 

"STOP MILKING YOUR SUBSCRIBERS.......EARN FROM THE CONTENT."

Easier Said than Done:

While what I mentioned above may seem to be a logical conclusion towards the diminishing revenues that an operator is having for the services, it is really easier said than done. 

1. Over the years players like Facebook, Google and Amazon have become powerhouses of content. 
2. Google controls more than 40% of the internet content that is flowing world wide with its own innovative solutions. 
3. These content giants have become so big that it is apparent for every operator to give them a red carpet than to actually negotiate them on terms of service. 

Where there is a will.... There is a way....

Yes, it is difficult. Yes, some of us may think we have missed the bus and we have just landed in a big mess. There is no other option to sustain than to invest but expect very less in returns. However, invest where is the question. 

1. Invest more in creating sophisticated Data centers so that content hosting becomes easier for the content provider in your environment. 
2. Invest in networks that are more evolving and allows more software-centric features. Networks that can sustain the changing environments of the industry and are not use and throw. They are stable and at the same time evolving. 
3. Invest in manpower who are innovative. Encourage innovation and unconventional ideas. Remember the biggest industries in the world cropped up as a result of unconventional ideas and not "Grey - Hair Experience". 
4. Prepare for change faster. This is because we have seen exponential changes happening from the year 2000 to 2020 and we will see a lot of changes. 

But the biggest question is..... Are the telecom operators "Willing" to do this????

OTT delivery needs an infrastructure that is robust, interactive and very high in bandwidth and at the same time takes a very less OPEX. It requires the operator to be steady because once the OTT is in mobile it is fine but when it enters devices like Smart TVs or any other high resolution visual devices then it becomes a big animal. 

I may understand a factor of buffering when I am seeing a movie in my mobile but then when I see it on my $1000 Smart TV I want to see it un-interrupted and high quality and this leads to the operator to upscale the services for the same. The networks have to be device sensitive so that they can understand device based requests and serve accordingly. This means high bandwidth networks are now evident. The 100Gbps is now going to be a store in the last mile rather than just being in the core part of the network and the core will be a multi Terabit mesh connecting several Data-Centers and servers in a resilient manner. 

Multiple feeds have to run a the same time and this would also mean local instancing of application in the edges that would require virtualization in great proportions. 

Therefore my friends the future is there.... It is certainly not dark.... And if you feel it is dark... Have a look at your kids..... However, it is a time where we as an industry invest in knowledge and innovation. 

Cheers

Kalyan