Magine, a Swedish OTT provider is launching a new business-to-business (B2B) team within the company, aimed at licensing its technology and OTT video platform to network operators and content owners who want to launch their own Internet video streaming services.
This follows an earlier announcement of its B2B strategy late last year by CEO Ambuj Goyal, as a key driver of the company's goal to reach 100 million users by the end of 2021.
The Magine Digital Media team will offer its in-house technology as a complete solution for operators, helping them benefit from Magine's knowledge of the OTT market and previous development efforts, according to the company.
Based in Sweden and offering OTT services in Sweden, Germany and Spain, Magine is the latest OTT provider to look at network operators as an opportunity, after initially launching services that directly compete with them.
Magine's new B2B initiative follows customer wins for another European OTT provider, Switzerland-based Zattoo, which has been able to sign up several broadcasters and service providers in Switzerland, Germany and Austria for its white-label platform. Zattoo counts 2 million monthly active users, but it's not clear if that includes users of its customers' services.
In the US, Roku Inc. has been an early proponent of this strategy, providing its set-top box, flagship operating system and even its branding where possible, to service providers. In Roku's case as well, it stresses that it can bring its OTT expertise to the table, and help operators. According to Anthony Ferrone, Roku's VP for pay-TV, "We have a consumer business of our own -- it is mission critical for us to think about our business, develop best practices and how to win in this space. So we are striking deals, developing, thinking where to position and price, develop the ad platform, mobile services, new devices, all of that -- and then we bring it to them [Roku's operator customers]." (See Streaming Is an Opportunity for Telcos – Roku's Ferrone.)
How significant is this shift towards operators? I would argue it is driven more by tightening of demand in the increasingly crowded OTT space rather than a desire to add value to the operators' business. OTT providers are increasingly looking at their long-term bottom-line and trying to identify strategies that will help them generate more revenue. Adding a platform component allows them to hedge their bets, at a minimum. And in a worst-case scenario, it could prove a lifeline if the direct-to-consumer business stutters in a market with an ever-growing number of entrants.
For operators, it's a more difficult decision to make. For the larger players, particularly those such as Comcast or AT&T/DirecTV who have invested in developing their own user interface (UI), these providers are less likely to be of interest. But for midsized and smaller players, they may be.
They could be of even more interest to some broadcasters, who don't have the same technology background or vendor ecosystem that a pay-TV provider would. But there are a number of streaming technology vendors who are targeting the same market, such as thePlatform (now part of Comcast Technology Solutions), Kaltura, Brightcove, Piksel, etc.
The differentiator for some of these OTT provider solutions will then be the features and user experience improvements that they can offer, beyond the reach of the pure-play vendors. Roku, for example, has been able to use its specialized devices like the Roku Streaming Stick, existing deployments with smart TV manufacturers and an in-house ad-sales team, among others, to bring in Tier 1 operators Sky and Telstra.
In the short term, regional relationships and presence will likely drive deployments, but as more OTT companies "vendorize" their strategy and existing vendors raise their game, this B2B approach will face as much competition as the direct-to-consumer market, if not more.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation