OTT is redefining entertainment, and OTT profitability is on many executive minds as we lead up to NAB this year. There are many trends and buzzwords in play – cloud, personalization, content monetization, software-defined workflows, UltraHD… and the quest to become the next Netflix or MLBAM. Underlying all of these individual technologies and trends, however, is the reality that OTT revenues from subscriptions and advertising are yet to approach the ballpark of their true potential. OTT profitability is an even more elusive goal.
Delivering vivid, compelling, premium content experiences to every flavor of device and platform in play is a complicated and expensive proposition. Delivering consistent, managed-quality experiences across the complete roster of today’s consumer video devices is even harder. Yet considering that profitability relies on both increased revenues and decreased total cost of ownership, content companies need to find a way to cost-effectively and consistently deliver premium content across the entire roster of tablets, Smart TVs, gaming consoles, streaming media devices, smartphones and many other classes of connected devices – both newly sold and already deployed.
This problem is about to get more complex. In many use cases today, services are able to rely on stream encryption rather than full-fledged DRM solutions. This will reverse in the wake of growth in resolutions to full 1080p HD and beyond to UltraHD, with rise in HDR and virtual reality, and with an expanding roster of valuable early-window content being made available online. To some extent, technology is coming to the aid of video service operators and OVPs seeking to bring economies of scale to the problem of delivering DRM-protected content through consistent experiences across all devices and networks. HTML5, MPEG-DASH, Common Encryption (CENC) and EME (Encrypted Media Extensions) bring a layer of uniformity to how secure video can be safely rendered using native secure playback infrastructure on every device. However practical considerations make this easier said than done. As I discussed in detail here, most browsers are shipping with support for a single DRM system, and many devices support no more than two DRM systems natively. Thus, while operators can begin to leverage the same compressed and encrypted streams for delivery to all devices, there is still a need to support many different DRM systems from a back-office perspective. Taken in the context of the need for consistent cross-device experiences, this then translates into a need to ensure users receive a consistent set of features, resolutions and experiences across different DRM systems.
This is the problem that multi-DRM system vendors solve. By abstracting all DRM cores within a single service-facing interface, and by amortizing the tremendous effort of building and maintaining secure DRM clients across all relevant devices and browsers, these solutions can go a long way in helping VSOs and OVPs built profitable, engaging OTT video services. There is a growing perception that DRM is free, but the reality of the costs of deploying a full service and ensuring it remains secure over time, is quite different. In a new white paper sponsored by Verimatrix, we talk about the various aspects of total cost of ownership of a DRM system. In the context of current and foreseen challenges for video service operators and OVPs, we also talk about best practices as uncovered during the course of our research on the DRM and OTT markets. You can download your copy of the paper at www.verimatrix.com/costofmultiDRM.
Avni Rambhia is the Industry Principal, Digital Transformation at Frost & Sullivan and brings extensive domain expertise in digital media markets, management consulting and business analysis. You can view her Frost & Sullivan profile here, and her Frost & Sullivan blog here.