Why Over-The-Top TV Apps Will Win

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Every time I hear predictions that over-the-top video delivery will overtake traditional pay-TV, I think, “maybe, but it’s gonna take a while.” After all, most people I know are augmenting their TV subscription packages watching with OTT, but few have cut it out altogether.

But my thinking changes altogether when it comes to TV apps. As I write in my weekly analysis for GigaOM Pro, this is where where I think OTT will rule sooner rather than later.

Over-The-Top TV Apps?

With video, anything delivered over the Internet but not as a part of the carrier’s own video service (but on the public Internet) is defined as Over-The-Top. Netflix Watch Instantly and Hulu are good examples.

TV Apps can be thought of the same way. In the U.S., carriers have their own interactive services and applications framework called OCAP. OCAP is Java-based middleware for applications within Tru2Way, and it’s been gestating for over a decade with little to show for it. While there have been some small successes, and a watered-down version called EBIF is available on many lower-powered set-tops, efforts by the carriers to roll out and actually use OCAP have been half-hearted at best.

OTT app frameworks are, on the other hand, set to explode. With the announcement of Google TV and the imminent arrival of a revamped Apple living room box, the TV apps in the living room will mostly likely be dominated by the OTT variety, and here’s why:

  • Carriers are lumbering dinosaurs. Sure, they’re extremely cash-rich and powerful dinosaurs, but they’ve not shown any sign in the past 15 years that they can figure out how to build the necessary underpinnings required for the rollout of a dynamic and thriving market for interactive applications.
  • Mobile proved the use-case for OTT Apps for TV. If there’s another industry that appeared as locked down as — or more  than– pay-TV in the U.S., it’s the U.S. mobile industry. Apple,  and later Google, cracked that market open pretty quickly, and with pay-TV, the big non-carrier OTT players (again, Apple and Google) don’t even have to jump in bed with the carriers (unlike they had to with mobile).
  • Innovative developers will gravitate to the faster-to-market platforms. Sure, there might be some companies developing TV apps for OCAP, but I guarantee there are exponentially more developers developing for iPhone, iPad, and Android, and by expanding to the TV screen, Apple and Google just gave them a whole new market.

The bottom line is: The cable industry’s approach to interactive applications and services is rooted in the late 90s and early 2000s when OCAP was born. The pace of innovation has been such that over the past decade – while the lumbering dinosaurs were nearly exclusively focused on the digital transition and HD upgrades – that the standards were outdated before they were completely rolled out. And now, Apple and Google (not to mention Boxee and other upstarts) are coming in “over-the-top.”

To read the detailed report, click here. (subscription required)

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