Inevitable: Growth of OTT Market & Its Move to Original Content

From The Online Reporter  
by Charles Hall 

It’s inevitable. 

•  The OTT monthly subscription services Netflix, Hulu, Amazon, Amazon’s UK-based LoveFilm and soon the Verizon/Coinstar venture will compete by getting as many movies and TV shows as possible. Wanting to maximize their revenue, the studios and networks will be reluctant to give them exclusives or even a few months’ lead time over the others. 
•  To get a competitive edge, the OTT services will scour the globe, looking for attractive content that they can buy the exclusive rights to, as Netflix has done with the Norwegian production “Lilyhammer.” It’s done something similar with an extended version of the Swedish “Millennium” movies, with extra scenes for each of the three original movies, such as “The Girl with the Dragon Tattoo.” The three films are now split into six episodes. 
•  The OTT services will fund originally produced shows that they can get exclusively to the extent that the shows don’t even appear on pay TV. Netflix started the trend with the upcoming BBC remake “House of Cards” with Kevin Spacey. Netflix also has in the works new episodes of popular “Arrested Development.” Hulu this week started showing its exclusive “Battleground” series. 
•  The pay TV services will realize they are losing eyeballs to their advertising, if not actual subscribers. They will begin offering their own OTT services for older shows and movies — much as Verizon is doing in its venture with Coinstar. And, as Verizon is doing, they will make the OTT service available outside their traditional pay TV footprint — and hopefully even go global. 
•  OTT services and some pay TV channels will start collaborating to produce original shows, with a pre-fixed scheme for when each will air them. 
•  CE hardware makers will continue to add apps for the growing number of OTT services. 
•  Original content will eventually include news, sports and live events, which are the three big draws that currently differentiate pay TV and OTT. Why shouldn’t iTunes or Vudu be able to offer pay-to-view concerts and sporting events? Or the OTT subscription services be able to offer weekly or daily news and talk shows? 

The big unanswered questions are: 

•  Can the broadband service providers build networks to the home and in the home, both wireline and wireless, that can handle the coming volumes of videos? Imagine what would happen if one of the main TV networks suddenly announces that all its live shows would be available online! The Net would crash within a day. 
•  How will the pay TV companies make the transition to an increasingly OTT world? Will they be forced to emulate the Verizon/Coinstar venture? 
•  How will the studios and other producers react to the opportunities of an OTT world and its ability to deliver national, or even global, distribution — to every home, all with one click?
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