Operator OTT services: cable killers or Netflix killers?

Monday 10 August 2015 | 16:14 CET | Background

Times are good for video consumers, with new offerings every day, new players entering the market and extensive investments in exclusive, original content. We're no longer limited to a handful of channels, and more new offerings can be expected this autumn, around the world. The market is expanding, and telecom operators are in search of their own model, with the right partners and prices. 


To start with, an overview of video content providers in the Netherlands:

  • Operators, such as Ziggo, KPN, CanalDigitaal, Tele2, Vodafone etc. They bundle access and content in a single subscription. Content is mainly offered over their own networks (DVB-C, DVB-S, IPTV, DVB-T), but in most cases also over the internet ('over the top'). In terms of content, they are primarily aggregators (channel package, VoD), with a few ventures into their own or exclusive content (a TV series at KPN or shows from the Ziggo Dome at Ziggo).
  • Broadcasters, such as NPO, RTL and SBS. They are both producers and aggregators. RTL is also active in multichannel networks on YouTube. The broadcasters generate income from the operators and advertising. Distribution is mainly through the operators, but also over the top, for example with NPO.nl, the catch-up services RTL XL and SBS Kijk and NLziet (SVOD service run jointly by NPO, RTL and SBS). RTL is also the owner of VoD platform Videoland.
  • Studios, especially Time Warner's HBO. HBO offers three channels in the Netherlands as a pay-TV package, as well as the HBO Go service for over-the-top delivery on demand. HBO Go is free for HBO subscribers. HBO Now, launched in April in the US, is a standalone version of HBO Go, with live as well as on-demand content. 
  • Independent VoD providers, such as Netflix, Videoland Unlimited (RTL) and Pathé Thuis (now separated from the cinema chain). The first two use a subscription model, the last is pay per view. Lebara Play, the new 'diaspora' service from the MVNO, is also in this category. These providers use the internet as their distribution medium, but cooperate with operators also in order to bring the content to TV screens. Netflix works with a number of providers to integrate its service in set-top boxes, from Totalplay in Mexico to Elisa in Finland.
  • Internet companies such as YouTube. Both in the video and music markets, Youtube is the elephant in the room, not to be missed. YouTube is working on its own SVOD service, without advertising. It has a significant amount of exclusive content, both from the multichannel networks and commissioned works, and also sometimes offers live streams of events. In addition, Google has Play Movies, a transactional VOD service. Facebook is doing its best to overtake Youtube in the market for short video clips. At the moment Facebook is at where YouTube was around ten years ago, with mainly user-generated content. Other providers in this category include Vimeo and Viewster.

A number of European players could also enter the Dutch market, such as Wuaki.tv (owned by Rakuten), Amazon, Voddler, Magine (broadcast TV) and Sony. Hardware is an important element in the market, also for OTT providers. The same as smartphones, smart TVs have their own apps. Customers without smart TVs can access the services using USB or HDMI sticks, such as Google Chromecast, or a box like Apple TV or a gaming console.

Operator servies

Next we look at the OTT services launched or planned by operators worldwide:

  • Telstra (Australia) will launch 15 September Telstra TV. Its service is based on the Roku box, which is a competitor in the US with Apple, Google and Amazon. Telstra is offering its own services on the box (BigPond for T-VOD and Presto for S-VOD), as well as access to other subscription services such as Netflix and Stan, catch-up TV and other apps. The exact details and pricing will be announced closer to launch. Notably in Australia fixed broadband services are still subject to data caps. Telstra exempts its own video services from the caps.
  • Verizon (US) is expected to launch soon a video service designed especially for mobile devices, thought to be called Go90. It's using the OnCue technology acquired from Intel and its recent takeover of AOL to deliver advertising. Verizon Wireless will reportedly have access to exclusive content, such as short videos from HBO. Verizon Wireless will not charge for data traffic generated over the video service.
  • Bell Canada is opening up its CraveTV service to all consumers, not just its own customers. The service offers on-demand TV series, new and old, as well as exclusive series. It costs CAD 4 per month.
  • Comcast is launching the service Stream for its broadband customers, expected in Q3. In addition to 12 live channels, customers have access to HBO and the VoD service Streampix, plus a cloud DVR. Price: USD 15 per month.
  • Lebara, a MVNO in Europe, recently launched Lebara Play, for EUR 10 per month. It offers live channels and VOD.
  • KPN will launch this autumn KPN Play. It will include initially 22 live channels, catch-up, VOD, HBO (incl. HBO Go) and a cloud DVR. Pricing is not yet known.

(Vodafone Netherlands recently launched the TV Anywhere app that offers only live TV. This is a 'TV Everywhere' application, as most all operators offer, so not part of this list).


Operators are also aggregators. Most (Telstra, Comcast, KPN) appear be open to independent aggregators and use strong partners (Netflix, HBO) to differentiate. Live TV is included in most of the offers, although not in Telstra TV and CraveTV. Only a few operators have commissioned their own content (KPN, Bell Canada). This is more for other players in the value chain: broadcasters, studios and internet companies.

Pricing is still an open question for Telstra, Verizon and KPN. Their offers include services that can also be purchased individually (Netflix, HBO), setting a clear bottom for the price. It's still unknown how much of a discount operators may be able to negotiate on buying in large-scale access to these services.

The strategy behind launching these services is likely different and a mix of elements for each operator: some are looking for a new source of revenue, a new service to sell or to lower churn, and in some cases providers may want to stimulate broadband usage. The latter does not apply for the standalone services from KPN and Bell Canada, which are pure aggregators. For these two operators, the new services are just as likely to serve as a new weapon against cable competitors as a potential 'Netflix killer'.

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

::: add a comment