By Antoine Charlet and Richard Pialat, two OTT experts at Globecast.
Supported by Thierry Monteil, one of our satellite TV experts.
Satellite television, which has been available since 1976 became popularised during the 1980s and 90s to reach what appears to have been a peak at the end of the 2010s. OTT essentially began with content on demand, including YouTube in 2005, and has continued to grow since.
So, do satellite and OTT compete with or complement each other when it comes to TV and video? Here are ten questions to help you decide according to your situation.
One of the first questions is what regions do you have rights for? But first let’s look at the problem from one level higher: who is your audience?
You are a channel or a local media group in the US, Brazil or Japan, for example; satellite definitely covers your region. No doubt about that.
What about OTT? Yes, it does too, but maybe not quite as well. Maybe not everywhere. Maybe not everywhere with the same quality. Even so, although the quality of broadband networks influences the best OTT quality possible, an undeniable advantage of OTT is the ability to provide service even in varied local access conditions.
By definition, a diaspora is in several countries: two, three or 150 – take your pick. Once again, it’s difficult to be sure you’re present everywhere with the same OTT quality (quality of the internet, geographical coverage of the CDN etc.).
By contrast, there’s definitely a satellite that covers your region, or a fleet of satellites if your diaspora is widely dispersed. The right answer depends on the number of regions to cover. Using multiple satellites can be technically complex and costly. Meanwhile, with OTT from a single geographical point you can reach all of your diaspora’s regions provided that the CDN chosen has good coverage.
Are you targeting young professionals? All around the world? Then you’ll have the same questions as if you were targeting a diaspora. Your target can potentially be everywhere. Of course, language can reduce your geographical footprint. However, although this audience could be geographically diverse, it will be more homogenous in terms of behaviours or the devices used.
To gain a better understanding:
Depending on your audience, and perhaps its purchasing power or its geographical situation, you’ll need to deliver your content to very different devices. Are you mainly targeting young people who are switching between their smartphone, tablet and PlayStation? Then you don’t have much of a choice: OTT is the answer.
Is your target made up of an audience that mainly watches your live stream from the living room? Then it’s satellite. Is your target a sports fan? The last FIFA World Cup™ showed that latency, which is bearable most of the time, can prove problematic at specific moments.
Are you already on satellite and is your audience increasingly digital? Then opt for an OTT second-screen offering.
If you website or app development skills, with OTT you can optimise playback from end to end, which is more complicated with satellite broadcasting on an STB.
However, there are myriad behaviours depending on the audience, from traditional viewers to Generation Z.
Habits also vary depending on the country:
Source: The Atlantic.com 2014
Although the TV screen’s share is declining almost everywhere, remember that on a TV, even a smart TV, you’re still watching the TV. This isn’t the case on other screens.
It might seem obvious, but without the internet it’s difficult to deliver a high-quality OTT service. Although the internet has been everywhere for a long time, the bandwidth question is still an issue. There are currently 32,000 SD satellite channels and 10,500 HD channels, as well as just over 100 4K channels globally. In 2023, there will be 26,000 SD, 18,200 HD and nearly 1,000 4K channels.
Although broadband internet will gain ground over the next five years, it’s difficult to connect its growth with the growth of a network that you don’t control at all.
This is the simplest criterion but also the most meaningful: satellite can reach the parts that the internet doesn’t necessarily reach (yet). More specifically, although you definitely need broadband access to watch an OTT TV channel, a user with xDSL access limited to a few megabits per second can only access the SD version of a programme, while a user who has fibre can watch the UHD version, if available.
Meanwhile, the speed question is not an issue with satellite. Once the distribution is HD or UHD compatible, you can reach your entire audience with the same quality.
More specifically, how many daily views does your content attract? Whether you have 1,000 viewers or 10 million, satellite delivers the same signal once. With OTT, you have to deliver 1,000 to 10 million signals. So the more viewers you have, the more financially interesting satellite becomes compared to OTT.
But what is the magic ratio for switching from one to the other? Opinions differ: some say that for between 100,000 and 500,000 viewers, OTT becomes more expensive than satellite. Others say that the break-even point for satellite is around 50,000 viewers. OTT is becoming increasingly affordable, because costs are falling by nearly 20% per year.
However, the time when satellite prices were surging every year is also over. The fact is that if you have 10 million subscribers, you theoretically need both in order to reach such a large audience. The difficulty lies more in the lower number range. Not to mention the fact that it all becomes more complicated if your signal is 4K…
What’s more, depending on the type of content and the country targeted, it may be that streaming isn’t allowed (adult or violent content) due to the regulations in place.
No sooner has the roll-out of 4K just got started, with over 70 services currently available, than 8K is already in the pipeline. Of course, it might be a bit early for 8K but depending on whether your content is shot and distributed in SD, HD, 4K or 8K, this will have a clear effect on whether you to opt for OTT or satellite. The larger and higher-quality the content is, the more satellite becomes a financially viable solution.
To watch a two-hour film online in 8K at a speed of 80 Mbps, you need to download just under 100 GB. To watch the Super Bowl, expect double that. Depending on your CDN prices and whether your users are large consumers, the equation could become complicated. Fortunately, CDNs allow you to reduce overall consumption in proportions that can reach 99.95% of caching for large audiences (expect 80% for a small audience). Your CDN costs will determine how easy it is to turn a profit from streaming your content, at least as things currently stand.
Solutions are nevertheless being developed, such as WebRTC (a standard present in HTML5 that allows peer-to-peer capability) and of course the new codecs (HEVC and AV1). And with very popular services it’s also possible to integrate caching equipment directly into operator networks to lower CDN costs, although here is where we reach the limit between OTT and a managed network. It’s therefore up to you to plan your move relative to 8K and 4K.
As far as satellite is concerned, although 4K and 8K come at a cost, this is easier to estimate and, above all, remains fixed regardless of the number of people watching the content.
There’s nothing worse than hearing a goal through your neighbour’s window, or finding out a result even though you’re still watching the match on your mobile on public transport. At the moment, satellite is better in terms of latency.
What about OTT development? Various improvements are on the way, with new formats (CMAF) and new ways of delivering the OTT flow (HTTP 1.1 chunked transfer encoding). The goal is to achieve something approaching satellite latency. OTT also provides an improved user experience by adding different stadium viewing angles, more statistics and replays in near-real time.
VOD on satellite definitely exists, just like Netflix definitely relies on OTT. If you’re envisaging VOD as an add-on, periodic or limited-scope service, satellite may meet your needs. What’s more, VOD is usually only offered to paying satellite customers and requires a satellite and OTT mix: the catalogue is provided by satellite and downloads take place via OTT.
If you see VOD as an essential part of your business model, OTT will be necessary. It will allow you to protect your content (DRM for example), deliver it in several levels of quality and formats (to target as many devices as possible), enrich the user experience (social media, links to other content or sources of information) and obtain a variety of statistics about how your service is used in order to improve it and therefore grow your revenue.
What’s more, OTT allows you to offer a catch-up service fairly easily.
Satellite isn’t (yet) able to compete with OTT on interactivity or value-added services, which can be provided using the internet. This interactivity is native to OTT, as it requires an internet connection. This connection can also be used for:
– A second screen and associated services
– Primary screen interactivity: surveys, stats, etc.
– Providing nPVR and start-over
– Virtual reality
– Sharing extracts of your content on social media
– Resuming a programme when switching from one device to another
However, HbbTV, like certain proprietary software embedded in devices such as CanalSat, offers a return link and provides a level of interactivity via satellite. This level may be entirely sufficient; not everyone wants to take control of the 24 cameras in the World Cup final!
Advertising? You’ll be happy with both, although OTT allows you to conduct targeted advertising (which can include links to the products or advertisers) and provides viewing statistics, making it an increasingly popular distribution method with advertisers:
Once again, the technology is advancing by integrating targeted ads directly into the feed to combat ad blockers.
HTML5 players now integrate the VAST protocol, which gives you access to a large number of adverts, lets you see how many times an ad has been viewed and allows you to sell an ad slot to the highest bidder.
Paid for content? Once again, you can monetise your content with either OTT or satellite. Of course, with satellite this involves negotiating content distribution via partners/operators, whereas with OTT distribution you can manage the monetisation of your content yourself (DRM, CMS). Because you have your own customer base, you can target your ad and subscription campaigns more effectively.
Satellite is evolving with the DVB-S2 and DVBS2X standards for transport and the improvement of HEVC encoding for 4K and 8K.
Things are also happening in OTT. Codecs, distribution protocols, ad management, etc. are rapidly evolving and don’t require changing a major infrastructure in one go. The content broadcast is adapted to each device’s capabilities, and a new feature or service can be rolled out in a controlled geographical region or to a low percentage of users in order to analyse their feedback and whether the service is better perceived or more used.
And then there’s 5G. Its roll-out begins in 2020, with increased deployment from 2022-2025, depending on the country. 5G could change things in OTT’s favour, although it could also be that the factors that slowed down 4G roll-out in some areas will be repeated in 5G’s case. Whatever the case, next-generation satellites will support the roll-out of 5G.
Between your audience, its location, its habits, your content, its quality, your value-added services and your monetisation, you have a choice between OTT, satellite or indeed both!
Ten questions, it’s a lot and yet maybe not much at the same time. Have we left out a question? Let us know.
And if you’d like some help in determining the best distribution plan, get in touch!