OTT Under India’s New Normal: Strategies for Service Providers

The 2020 pandemic has completely changed the way we look towards sources of entertainment in India, providing new opportunities for Over the Top (OTT) content players such as Netflix, Voot, and Disney-Hotstar. Amidst restrictions in movement amongst Indians this year, the country’s OTT sector saw a 30% rise is paid subscribers between March and July 2020, from 22.2 million to 29 million. According to FLYX, a social network platform for OTT content, 50% of surveyed users purchased an OTT subscription during the pandemic.

By Gautam Billa

How OTT players are adapting to new demands

The breadth and depth of India, with a large young population, makes this league of users –which is also mobile savvy – quite attractive to OTT players. While Tier 1 cities are leading consumption patterns, cities that are Tier 2 and beyond are not far behind. With price drops in smartphones and data offerings, video content consumption in rural India has taken the larger share of the pie, at 65% as compared to the urban markets according to Broadband India Forum. Interestingly, 50% of overall streaming accounted for Hindi language. Furthermore, 90% of total consumers watch content in regional language, while only 7% watch English content³.

The demographic situation and heavy demand surge has compelled OTT players to devise a regional-centric strategy .Speaking to our customers serving OTT demands in India, they describe these pivotal trends:

1) High traffic is predicted in India for OTT consumption, which clearly requires better network management and, in many cases, more air waves and spectrum to support new mobile users.

2)Currently, the fixed line broadband penetration is India less than 10% (TRAI data), however, as per Crisil, the data usage has shot up 25-30% ever since the lockdown⁴. As more and more users move to OTT consumption on to larger screens at home, broadband speeds and stability are key to maintaining quality of experience (QoE). Hence, there is an urgent need to ramp up networks, both in terms of scale and robustness.

3) Regional content preferences clearly mean more market opportunity in Tier 2 cities and beyond, which requires network expansion.

4) While paid subscriptions are picking up in India, consumer behavior still varies in subscription purchase trends for watching OTT content. Each OTT provider is coming up with pricing plans to grab attention from the Indian audience, e.g. mobile centric plans and bundled plans with e-commerce benefits, special pricing for mobile and tablet subscriptions ,among others.

5) Viewers prefer High Definition (HD) video content over standard definition (SD); hence, more data consumption is driving networks to run hot in the immediate term. During lockdown, OTTs had shifted to SD broadcast, but now they are back to HD broadcast.

How India’s OTT trends impact telecom operators today

Because most consumers in India access OTT content from their mobile phones, mobile telecom operators will have a major role to play in providing seamless connectivity.

Telecom operators in India are impacted by trends in three broad areas: revenue, data services and QoE.

While operators are experiencing huge surge in bandwidth consumption, revenue growth is not proportional. As data consumption trends continue to rise both from subscribers count and high definition content, operators are moving towards offering multi-play bundled services as a package (Connectivity + OTT). This leads to a win win situation and drives collaboration between OTT and Operators.

OTT success will depend on a strong Edge Cloud strategy

Over the last few years, OTTs have already created Hyper-Scale Data Centers to serve high capacity workloads. As newer applications and use cases emerge, there is a need to create a distributed Hybrid-Multi cloud environment that can process a part of the workload at the edge and the remaining could still be processed in the central cloud.

Edge Cloud addresses the demands for regionalizing content and catering to high traffic forecasts (for HD and UHD streaming), shifting the location of OTT applications from multiple data centers to data centers at the edge. The move helps intelligently scale infrastructure both within and between edge data centers and to the central cloud, while automating workloads between locations at the edge of the network.

OTTs have mastered the compute and storage aspects of this distribution. However, when this distribution needs to be done across a WAN (as opposed to inside a data center building), the connect dynamics play an important role. The scale, robustness and latency performance of the connect underlay needs to be replicated over a much wider geographical area.

This will drive new architectures on the network side. The architectures are typically driven by parameters like high capacity and single hop connectivity.

Collaboration between the OTT players and service providers will provide the advantage of utilizing service providers’ extensive infrastructure and footprints closer to end-users and deliver the expected quality of service with minimum cost per bit. Such strategic partnerships are already emerging in India and globally, such as in the case of AT&T with Google Cloud and Jio with Netflix. Because the Edge Cloud provides network awareness and solutions, OTTs can benefit from the intelligence.

Ciena’s Adaptive Network solutions have played a critical role in some of the largest inter-data center and cloud architectures in the world today. The same Adaptive Network principles now extend to the metro, regional and edge networks to meet the demands of next gen connect cloud convergence. The Adaptive Network framework can help the OTTs and service providers ensure that the performance of an Edge Cloud model can scale and adapt to meet the ever-changing demands of the network edge.

Billa is Senior Director at Field Systems Engineering, Ciena India