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OTT video “may lift legacy broadcasters more than pure plays”

While standalone over-the-top video services like Netflix continue to grow their customer base, broadcasters still account for the majority of popular OTT services, according to a new study from UK-based professional services firm Deloitte.

The report predicts that in 2013, in markets where such services are available, two of the top three OTT videos services are likely to be provided by existing broadcasters and distributors, while “pure play” OTT providers are expected to only serve less than 10% of total TV households.

This domination of the market by existing big players is attributed largely to the popular appeal of legacy broadcasters’ brand and content: most viewers will remain faithful to the broadcasters and programmes they have watched in previous years, so long as those broadcasters continue to provide the type, quality and quantity of programmes that they like.

Viewers will mostly use broadcasters’ OTT services to catch-up on programmes they were unable to watch or were unaware of when first broadcast. Viewers will generally watch programmes via OTT very shortly after first transmission: hours for sports and news, up to a day for reality, soap operas and dramas and about a week for documentaries.

The freshness of content is likely to be key to popularity: although some portion of OTT viewing will be ‘long tail’ shows of more than a week old, Deloitte estimates that more than 75 percent of programmes will be watched within a week of initial broadcast.

Another factor expected to drive demand for broadcasters’ OTT services is awareness: the majority of viewers will have been exposed to the broadcasters’ brand for decades: the OTT service is a natural and seamless extension of that brand.

Broadcasters are also likely to promote their own OTT brands regularly over the typical 3-5 hours viewing of broadcast or pre-recorded TV that the average citizen with access to television watches daily.

The consumption of programmes and movies via OTT distribution is likely to remain small in proportion to total consumption, says Deloitte. The vast majority of viewers in 2013, and in subsequent years, are likely to continue to default to broadcast and the TV schedule, before checking what is stored on their Digital Video Recorder (DVR) before finally accessing OTT services.

Deloitte’s expectation is that even in markets with extensive broadband roll-out, on-demand TV and movies will largely represent only a few percentage points of total viewing, whether this is via broadcasters’ pay-TV companies or pure-play OTT provider sites.

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