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Eastern Europe: The Final Frontier for OTTThe diversity of languages and small local market sizes coupled with a lower price threshold for OTT services will limit the impact of OTT video in eastern Europe. But adoption will vary significantly by individual country, and younger, English-speaking consumers offer some potential for Hollywood content. These were the conclusions of a number of operators based in eastern Europe, including Slovak Telekom, Deutsche Telekom, Telekom Austria and Lithuanian MSO INIT. (See Bleak Future for OTT in Eastern Europe – Operators.) Nikola Francetic, head of group content for media and broadcasting at Telekom Austria Group , said the opportunity to expand the business through OTT was limited, especially compared with opportunities for new mobile services. But there could be some potential for expanding services within some demographic groups in some central and eastern European countries. Telekom Austria has launched an OTT service in Bulgaria, and will be launching soon in Croatia, Macedonia and Slovenia. But according to Laima Zivatkauskaite, vice president at Lithuanian MSO INIT, Netflix Inc. (Nasdaq: NFLX) was struggling in Lithuania. Only 2% of the country had used the service so far, while linear TV viewing was not declining. "Catch-up is our first priority," she said, "even more than VoD." OTT was not a priority since Lithuania, like a lot of countries in the region, also suffered from widespread piracy. She also didn't agree with the idea that local content or localization was the main problem, skeptical that even local content would justify the cost of Netflix (considered high for the region). Its best bet, she felt, was to offer Hollywood content in English, target it at the younger and more affluent consumers who were more likely to adopt advanced services, and leave older groups to watch linear TV. This was consistent with comments from Luana Alexe, senior product and service development manager at Slovak Telekom . In Slovakia, the operator launched OTT services initially as a value-added service for its existing subscribers, but noticed a "shift in usage patterns," suggesting potential for a standalone OTT service targeting younger users who may not sign up for traditional pay-TV. Thomas Stanekar, head of the Deutsche Telekom AG (NYSE: DT) TV Technical Services Center, believes that OTT usage will peak quite quickly and then decline. He shared an interesting finding from DT's Hungarian subsidiary, Magyar Telekom, to prove his point. In 2016 the operator streamed the Euro soccer tournament live to its subscribers. Given the tepid sports viewership in Hungary, Magyar Telekom was concerned when traffic started to rise unexpectedly. Hungary had been drawn to play neighbor and rival Austria, and the match drew an unusually high number of viewers. Not only that, Hungary went on to beat a stronger Austrian team. This generated tremendous excitement for the next match against Iceland, and pushed Magyar Telekom's network to the very edge of its capacity. However, when Hungary actually qualified for the next round, traffic dropped. This was because viewer behavior changed. Now that it was a big deal, people planned to watch Hungary's matches. And they wanted to do it surrounded by friends, in a bar or other social situation, rather than streaming it to a laptop or smartphone screen. Telekom Austria's Francetic had a different argument: "The OTT universe is becoming too fragmented," he said, "and maybe consumers will be looking to operators again to provide a simple basic service." Overall, it seemed the impact of cord-cutting was still quite limited in the region, and correspondingly the take-up of OTT services was also limited. While younger, affluent and English-speaking viewers might explore such services, local operators believe the large majority of pay-TV audiences will continue to subscribe to traditional pay-TV services in the region. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
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On-the-Air Thursdays Digital Audio
ARCHIVED | December 7, 2017, 12pm EST
Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
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