It's Prime Time to Monetize OTT Video

Deep Dive

It's Prime Time to Monetize OTT Video

By Ken Osowski, Director of Solutions Marketing  |  November 04, 2013

Currently mobile video usage habits are more about viewing shorter length video content from sites such as YouTube (News - Alert) than renting longer TV episodes and feature-length movies, primarily because of data usage limits imposed by existing mobile data service plans. But the popularity of fixed network video streaming has created a broad diversity of licensed content accessible through cost-effective, monthly subscription services from Netflix, Hulu (News - Alert) and others that mobile device users in fact may already subscribe to. At the same time, mobile device manufacturers are introducing a wide range of mobile devices with even higher resolution screens and processing speeds that are capable of supporting the highest resolution video streaming available from these services. 

For mobile operators, all of these factors combine to create challenges to overcome along with revenue opportunities to seize when looking to encourage OTT video usage. But this has to be achieved without operators breaking their networks, depleting the consumer’s bank account, providing a poor quality experience, or worse yet modifying the consumer’s behavior to only watch streamed video content on Wi-Fi access networks. The time for mobile operators to capitalize on mobile OTT video usage is now and so is the technology needed to make it happen.

Mobile subscribers want more granular video pricing models and content selection. This has been the key issue for consumers deciding to use OTT services in fixed line networks. Fixed line operators have traditionally created video service plans that bundle specific channels and premium content. OTT video services break this model and give consumers the choice to pay for what they like at a price they are willing to pay. Ultimately, this will put the subscribers in charge of deciding what mobile video services they will use, whether or not mobile network operators embrace it. While heavy users of mobile video are willing to consume video on mobile networks, current usage quotas are too low for extensive viewing.

Awareness of what is happening in their network is the first step for mobile network operators to understand OTT video usage in their network. Service planning should be centered initially around subscriber, device, location, and application awareness in the operator’s network, helping the marketing team understand mobile video usage characteristics and patterns that can help them to define service plans for which users would be willing to pay. Understanding the popular content providers, areas experiencing heaviest video usage, and video consumption across different service tiers are all critical to understand, and then optimize and monetize, OTT video.

Optimization is the next step, allowing mobile network operator to enhance users’ quality of service and quality of experience when streaming video to their mobile devices. This directly improves customer satisfaction and, ultimately, reduces churn rates. Traffic management, prioritization, video optimization, and congestion management techniques can be used to control bandwidth-intensive video streaming to improve the bandwidth per subscriber, application, device, service plans, and other traffic classifications.

At the heart of monetization is the paradigm shift from usage-based to value-based pricing service plans that encourage mobile OTT usage. This includes service-centric pricing that accounts for who, what, when, where, and how subscribers are using their OTT video subscriptions in the operator’s network. Value-based service plan pricing matches subscribers’ usage patterns to pricing based on what device(s) they are using, usage location, time of day, video-specific usage volumes, and video application prioritization. Because an approach too aggressive can limit monetization opportunities, detailed analytics to optimize pricing plans are critical to success.

Video content-aware services can be created to build incremental video service to the mobile operator’s base data plans, including:

zero-rated video plans;
time-of-day video prioritization or charging;
video bandwidth prioritization;
location-based video plans;
multiple video device shared data plan usage;
specific time-of-day and day-of-week video service plan options;
video QoS management;
incremental video specific service plan quotas; and
subscriber-specified video limits.

OTT video services can threaten a mobile operator’s service revenues and margins while OTT video content providers reap the benefits of the revenue they generate. Their video service pricing does not have to account for network costs since the mobile operator makes this investment. This puts a significant strain on the operator’s profit and loss statement since its network resources can be disproportionally consumed by video streaming when compared to its baseline data services without a tangible revenue offset. So unless mobile operators embrace and monetize OTT mobile video as a prime time strategy, OTT mobile video will remain a threat to their strained business models.

Ken Osowski (News - Alert) is director of solutions marketing at Procera Networks (www.proceranetworks.com).


Ken Osowski is director of solutions marketing at Procera Networks (News - Alert) (www.proceranetworks.com).

Edited by Stefania Viscusi

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