The rise of OTT services have led many to question the definition of broadcast, but the focus should be on the needs of end-users, says Stan Moote.

While the word broadcasting has come to be commonly accepted over the years as meaning ‘one-to-many via a transmitter’, a true definition of the term is ‘to cast or scatter in all directions’.

This leads me to believe that delivery via the internet fits within this meaning too. So what is the resistance to calling any form of programme delivery broadcasting?

It appears to come down to the concept of ‘on-demand’. Broadcasting is considered as linear programming and on-demand is, by definition, non-linear programming.

These beliefs remind me of the ‘religious’ wars the telco industry had over ATM vs MPLS (Asynchronous Transfer Mode vs Multiprotocol Label Switching), or for that matter even DSL vs DOCISS.

Frankly today, none of that really matters anymore – it is not about the technology, it is about suiting the needs of the end-user. We don’t care if our data carrying technique is ATM or MPLS, we care about passing data around based on assured results. It is up to the providers to decide on the technologies used to please their customers.

So why pigeonhole broadcasting? OTT has progressed to include live distribution of content. Yes, it perhaps isn’t always 100% as reliable as traditional transmitters, but this is rapidly changing.

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Can you expect your TV to work if you have a poor antenna or cable system connected up with bad coax, or trees waving with the wind in front of your satellite dish?

Certainly not, so why should you expect OTT to work over unprovisioned networks? The fact is we do expect this, and frankly, with the improvements with MPEG-DASH and caching, it is amazing how reliable Internet delivery has become. That being said, viewers still, of course, need to have a reliable service at their end, just as they need proper antennas and coaxes for OTA, cable or satellite delivery. OTT set-top-boxes are rapidly taking over traditional distribution even for linear programming.

According to Leichtman Research Group, the USA’s largest cable TV providers, who represent around 95% of the cable market, had 48.6 million subscribers at the end of March this year while Netflix had 50.9 million customers.

Compare this to five years ago where cable had more than double the number of Netflix subscribers. Netflix stated clearly this year that it is not heading into providing live streaming.

We need to get over the mindset of broadcasting versus on-demand. Most linear programming has been well prepared and stored up on a server waiting for its time-slot to be aired. Essentially the only reason it is not on-demand is purely for the purpose of paid advertising timeslots; whether I watch it from a transmitter (at the appropriate time), stream it live or see it later – it is still the same programme being ‘broadcast’.

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My point is any type of programme distribution from now on should be considered as broadcasting.

Even die-hard broadcasters now cater to OTT feeds for catch-up or mobile viewing of linear feeds. The issue at hand is no longer the technology used for programme distribution; it is strictly on the business side. And the business side is currently stressed over this concept.

Traditional broadcasting costs are fixed – we understand the Capex for the playout equipment, master control, transmitters and facility charges along with the electrical and staff needed to run the operation.

Selling advertising alongside traffic and billing is again well understood.

Ratings are always in question, however, in the business sense, the process is agreed upon. We have been doing traditional broadcasting for years and it is now increasingly being referred to as ‘managed delivery’ or ‘managed linear’ rather than just plain broadcasting.

With traditional broadcasting or ‘managed linear’, the number of viewers watching is not a cost variable – it is a profit indicator. With OTT (unmanaged delivery) it is both a cost and a profit indicator; delivery costs aren’t fixed. Estimates need to be made to calculate the number of viewers and where these viewers are, geographically. This is a complete mind-set change that chief financial officers and chief technology officers need to figure out together in conjunction with their entire operations.

Just a couple of stats to put things into perspective. IDATE forecasts that the global video on demand sector revenue for 2017 will be €34bn with €25.2bn of it being from OTT (i.e. over the Internet). Big numbers!

However, IDATE also forecasts that ‘managed linear’ will still account for 82.3% of global TV industry revenue in 2022 regardless of the delivery path, with on demand just 17.3%. Whatever you call it, managed linear is not going away any time soon – despite the continuing explosion of on-demand services and viewers.

Bottom line - the fact still remains that content is king, not how it gets distributed. So why not consider calling all types programme distribution – broadcasting.

Stan Moote has worked worldwide in the industry for over three decades and is the CTO for IABM