OTT Breakthroughs — Google, Pandora and Hulu (Oh My!)
In July, BIA/Kelsey projected that OTT homes — or those services providing linear and nonlinear video services over third-party bandwidth to the TV — will exceed cable homes by 2013. A February IMS Research report on “Internet Video to the TV” pegged 78 percent global growth in OTT devices, with 25 percent of American households able to display Internet video on TVs. After a flurry of new releases and partnership agreements, device makers, middleware companies and content providers are catching up to — and justifying — these forecasts.
Here is a recap of recent developments from major labels competing for mind and market share in the emerging IP and connected TV markets.
Google TV: Yesterday, the online search giant unveiled several features that will part of its soon-to-be-released TV platform on its new Google TV microsite. It has content partnerships in place with the likes of HBO, CNBC (as part of its Real-Time application, which allows for simultaneous live stock tracking and TV viewing), Netflix, Amazon VOD and Pandora.
While Google TV will compete directly with the repackaged, $99 Apple TV, the products are not entirely similar. Google, through the implementation of its Chrome browser, aspires to open up an unwalled experience that allows for full Web search of video and other digital content. Apple operates a set-top box portal, in which it amasses content offerings for users to choose from, notably TV shows and movies that can be rented for 99 cents from the iTunes store.
Google TV middleware is not a box unto itself, but will be layered into connected TVs from Sony, boxes from Logitech and Blu-ray players. It is expected to be officially released later this month.
Pandora: The pure-play Internet radio company was a popular topic at last week’s NAB Radio Show in Washington, D.C. While traditional broadcasters chase the online and mobile listener volume that Pandora has accrued, it was busy expanding its audio advertising network beyond PC and mobile products and onto connected TVs and Blu-ray players, where it already has placement on Roku, and now Google.
The ad platform will initially extend only to selected large-scale clients, with Ford being the first. Six total brands, each enjoying category exclusivity, will be featured each month. Pandora made no public mention of the locally targeted display ads that it sells on PC and mobile devices migrating to the larger screen.
Hulu and Netflix: Big weeks for both aggregated digital content providers, as Hulu struck deals to avail its premium service, Hulu Plus ($9.99 monthly subscription), to both Roku and TiVo Premiere to stream on their STBs. It marks the latest score for Roku, which is gaining acclaim and momentum as a viable threat to bigger names such as Apple thanks to a deepening content trove that features Amazon VOD, Netflix, Major League Baseball, Ultimate Fighting Championship, Vimeo and now Hulu.
Netflix, which is known for richer movie choices but a leaner network TV menu than Hulu, is a fixture on most IP video providers and connected TVs. More than 100 devices, from STBs to gaming consoles, can pipe Netflix content to a TV screen. With on-demand streaming having surged by 37 percent from 2009, the company is considering unveiling a streaming-only plan in the U.S. A similar, DVD-free subscription plan is already up and running in Canada.
The combined effect of these developments points to the continued adoption of OTT technology. As BIA/Kelsey has pointed out, opportunities for local broadcasters will quickly surface to reach new audiences and serve advertising in interactive and dynamic formats. However, they must take heed of this burgeoning trend and develop cogent strategies formed around technology partnerships that will allow them to take advantage of OTT capabilities.
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