Mark Ramberg is a veteran of the media technology industry, having held various technical, business, and leadership roles at companies ranging from startups to the Fortune 100. Currently, Ramberg leads Akamai’s over-the-top (OTT) television business strategy where he strives to help media and entertainment companies bring the best quality, next-generation TV experiences to their audiences. Prior to Akamai, Ramberg led media business and technology efforts at such notable companies as Microsoft and Amazon Web Services.
In this week’s “5 Questions,” Ramberg discusses the future of the OTT industry and what role traditional pay-TV will play in the developing landscape.
Is there any saving traditional pay-TV? If so, how? If no, Why?
There are many facets to this question, so we need to take a step back and look at what people mean when they say “traditional pay TV”. Just a few years ago when over-the- top (OTT) TV started coming onto the scene, everyone looked at it as a newcomer, an interloper, a disruptor – something that carried with it the hope of breaking out of being beholden to ever increasing monthly pay-TV bills and mediocre user experiences.
But now the primary difference between OTT and what people think of as “traditional” TV largely comes down to the networking technology used to distribute the signal. We’ve seen the evolution over and over throughout the history of TV distribution, when the distribution medium went from over-the- air to cable, then to satellite, then to internet based distribution.
The interesting thing about OTT is that it opened up a previously closed symbiotic ecosystem of content suppliers and content publishers, making it possible for niche content creators to reach significant audiences based on the quality of their content and consumer demand. It also unlocked the supply chain for companies that provide the technology and infrastructure used to distribute and consume TV programming – the best example is that it’s no longer a requirement to rent a set top box from your cable or satellite provider in order to receive top tier content on your living room TV; instead you can choose from a variety of high quality OTT boxes from Roku, Apple, Amazon, Google, and so on.
But aside from the open ecosystem that OTT is inherently built upon, the question of whether it is possible to save traditional TV is really asking if it is possible for traditional TV programmers and distributors to evolve and stay relevant in a world where OTT is a reality. From a business model perspective, there’s really not much difference between traditional TV and OTT – there are still subscription services, still ad-supported programming, and still free programming. Sure OTT provides more consumer choice, but with that comes additional complexity for consumers. The traditional pay TV providers (cable and satellite) still provide a much easier to understand one-stop- shopping experience, so until OTT can provide a similar experience it will continue to be relegated to the more tech savvy audiences.
How important has original content become for OTT providers?
The old adage rings true: Content is king. From a consumer perspective, aggregator distributor services are only as good as the content they have. We’ve seen many of the big players in the emerging OTT space (Netflix, Amazon, etc.) begin to create and distribute their own original content, and this trend will continue. The primary reason for this is that consumers now have multiple outlets to get their TV programming from, whether that is direct to consumer services from NBC, CBS, etc., or via MVPD aggregator distributors like Amazon Instant Video, Hulu, Sling TV, and so on. OTT streaming services needed to find ways to differentiate themselves. If consumers could get House of Cards from Amazon Prime Video and Hulu, what incentive would they have to subscribe to Netflix?
What does the future of OTT linear vs live content, hold and who do you think will be the winner: Short form or long form content?
Many streaming services started out as primarily video-on- demand (VOD) services, and it was initially believed that consumers would gravitate toward “snackable” short form content. This belief was based on the idea that streaming services would largely be consumed on portable devices such as phones and tablets while people were commuting or on a break at work – that these portable devices would always be relegated to a secondary screen experience. However, what has actually happened is that even on mobile devices the fidelity of the experience (screen resolution, high bitrates/framerates, etc.) has increased to a point where they have become a primary screen experience for many consumers. Couple that with the pervasiveness of in-home OTT devices such as Roku, etc. that enable consumers to have a viable alternative to traditional cable and satellite TV offerings on their living room TVs and it’s no longer as simple as putting OTT consumption habits into one bucket or another – the answer is that we’ll see all of the traditional content types including live, linear, short and long form, VOD and so on being consumed via OTT experiences.
What is holding OTT back from taking over the sports industry?
Traditionally this has been all about latency from live. The classic situation is when someone is watching the football game on their cable/satellite provider in one room and you are watching it via streaming in another room, only to hear cheering in the other room and then 45 seconds later you see the touchdown via the stream. That’s not acceptable to consumers. The good news is that this is changing rapidly as the OTT technologies and infrastructure matures. Now while it is relatively easy to reduce the latency to be on par with cable/satellite (which is about 8 seconds behind live), it’s much more difficult to provide that low latency at scale with high resilience. Without all 3 of those factors, you end up with a fragile system that ultimately will not be able to sustain the level of TV experience that consumers expect.
For live sports, it also goes beyond consumer distribution to the primary distribution and contribution workflows. Traditional workflows currently rely on microwave and satellite signal transmission for getting content out of stadiums into production trucks, then back to the production studios before the content is distributed to consumers. Consumer OTT distribution workflows have largely moved to use segmented file based media and use IP (Internet Protocol) based distribution mechanisms and we can expect to see that trend continue to move upstream in the production workflows as well, but this will take some time since the traditional workflows are based on specialized hardware where companies have made significant capital investments.
How will content providers like Disney are looking to take control of their own destiny and what does it mean for consumers? Is there such thing as too many platforms?
Content owners are trying to strike a balance between maximizing audience reach through multiple distribution channels and maximizing potential revenue. Historically, content owners needed the cable and satellite companies for distribution since they were the ones that had the pipes into consumers’ homes. But with the ubiquity of the internet, coupled with the fact that OTT is now a viable substitute for cable and satellite from a quality perspective, content owners are no longer dependent on the cable and satellite providers in order to reach that audience. And, if the content is strong enough (which arguably Disney/Pixar/ESPN/Marvel/etc. content is), they probably don’t need as many distribution channels because the audiences will seek out the content wherever it is. It’s an interesting dance right now, however, since the content owners still make the bulk of their revenue from carriage fees, but that’s shifting to the point that the content owners are potentially able to use OTT as leverage to get higher carriage fees. I think it’s an interesting move to single out Netflix however. Does it signal that they won’t offer their content to Comcast/DirecTV/etc. in the future either? Who knows…