How Is 5G Network Changing The OTT Market?
Continuous, consistent, safe and fast access to anytime, anywhere internet has resulted in the popularity of the 5G network even as it still looms over the horizon.
The introduction of the fifth-generation of cellular networks commonly known as 5G will see connectivity and user content consumption change drastically.
As per reports, a growing population of smartphone users will result in mobile data traffic increasing by almost 5X by the end of 2025. This is because along with offering multiple devices’ support, 5G is expected to change user’s interaction with digital content. This advantage of 5G is particularly significant as it will make video content viewing much easier by:
- Enhancing connectivity with a higher bandwidth
- Making content transfer smooth and continuous with faster data transfer speed
- Eliminating latency
How Does 5G Matter?
Technology evolution is always dynamic. 5G which is being touted as the successor to the current 4G, is one of the biggest leaps of wireless technology evolution. It would not be wrong to say that 5G enables a superlative new wireless network that seamlessly connects almost everything from machines to devices as well as objects to people.
Some features that make the 5G technology such a huge improvement are:
- Fast internet facilitated by the delivery of very high multi-Gbps data speed even during peak times
- Ultra-low latency that makes the time lapse between action and response almost seem imperceptible
- Greater reliability of network
- Massive network capacity that can support multiple users and devices concurrently without any performance dip
- Increased multi-enterprise app and user support availability all the time
- Uniformly excellent user experience
Consumption of information, content creation, everyday service delivery etc. have all witnessed widespread and rapid changes in the past decade. During this period, mobile-based technologies and other apps have experienced huge advances in improving the quality and access of aggregation services and entertainment. This is aptly mirrored in the digital meteoric rise as experienced by video sharing platforms, OTT, streaming services, shared transportation, online food ordering etc.
The 5G network is expected to transform and bring in new capabilities to OTT services in India. The OTT environment is already experiencing snowballing growth globally and more specifically in a populous technology savvy country like India. The advent of 5G will add more essential opportunities to it, especially advertisement related ones. General viewing is also set to undergo a transformation that will see more video content creators uploading content of varied genres.
But 5G goes beyond smartphones. Its ability to leverage connectivity and technology helps open up hitherto unexplored opportunities in almost all spheres of human activity, some of which are as yet unfathomed or uncovered. Thus 5G is expected to add service dimensions by empowering technologies like:
- Internet of Things or IoT
- Robotic process automation or RPA
- Artificial intelligence or AI
- Augmented and virtual reality or AR/VR etc.
Current Status of OTT Services in India
The OTT market in India is capital intensive. Long term commitment by investors is a prerequisite since the profitability of this sector depends on the sustainability of the monetizable user base. The per capita M&E annual spend in 2021 is predicted to be around USD 32 as compared to USD 222 for China and USD 2260 for the USA. Thus OTT investors and players fight for a much smaller share of the subscriber’s wallet in India. But the investment in licensed and original content has to be continuous.
However, the Indian consumer is also price-sensitive and with the chance of OTT fatigue setting in due to the rise in the number of OTT channels available today, the investors will have a tough time protecting their subscriber base. Only with robust technological investments will the OTT players in India be able to deliver superlative Quality of Excellence or QoE to subscribers across India.
However, improving QoE also means moving away from traditional capex-intensive operations of the data centre and adopting cloud-based solutions. This will allow operators to:
- Enable reliable content delivery with no downtime and
- Meet peak-traffic demands.
Today, OTT players are also opting for a partnership with resilient CDNs or Content Delivery Networks to gain enhanced support and be able to scale-up dynamically for delivering content concurrently to millions of users across India. By adopting edge scaling, OTT services have managed to localise traffic and further improve content delivery within the local ISP network.
5G and OTT in India
OTT services in India are expected to benefit immensely from 5G network deployment. As they are expected to be 10x times faster and enable a 50% reduction in latency, 5G will enable OTT players to deliver improved UX at marginally lowered costs.
India is expected to have more than 500 million OTT subscribers by 2023. By bridging the gap in performance between OTT streaming and broadcasting services, OTT players can ensure the provision of high-quality, low-latency and cost-effective content to their subscribers. The ability to live-stream such lucrative content such as music shows, sports and e-gaming events, would further drive OTT adoption in India in the coming years.
Thus, ways by which OTT adoption would further increase with the advent of the 5G technology are:
- Bridging OTT and broadcasting gaps: 5G is expected to decrease the demand for broadcast TV and increase the demand for subscription-based OTT services. However, most believe that 5G can help bridge the gap currently present between broadcasting and OTT. By combining 5G with cloud computing, broadcasters are seeking to enable subscribers to gain access to digital content irrespective of their device computing power. Thus consumers will have a choice to watch live events either on broadcasting TV or OTT platforms.
- Satellite broadcasting media demand would decline: 5G comes with the promise of enhanced performance, stability and reliability. Thus, content users will be encouraged to access a plethora of varying formats, genres and types at their convenience. The use of 5G would enable them to enjoy HD and 4K video streaming seamlessly without disruptions. Thus there will be a rise in demand for OTT services in India and a decline in the demand for satellite broadcasting media.
- Switchover to connected TV: Smart TV or Connected TV is very much in preference with the new-age generation. With its built-in internet and other integrated web features, it will prove to be the perfect conduit to stream digital content using the 5G network. Thus, there will be an increase in OTT platform subscriptions as more and more users switch over to smart TV.
- Enhanced real-time advertising: By leveraging the benefits of the 5G networks, advertisers can ensure real-time data movement. This would enable them to serve targeted ads to consumers instantly and directly. Thus the advent of 5G would open up new opportunities for advertisers. They would leverage OTT platform popularity to serve targeted and highly localised ads without incurring any extra charges for data storage or transmission. This would again benefit the users as AVOD content on the OTT platforms would increase.
- Collaborations and partnerships: Currently, leading OTT platforms are already collaborating with telecom partners to ensure content streaming to increase subscriber base and retain existing ones. However, most subscribers complain of quality issues over the 4G network. The advent of 5G would enable OTT services in India to collaborate with 5G providers and easily meet surges in content demand.
5G is a never-before explored field of wireless connectivity. Thus, until 5G connectivity is officially deployed, it would be difficult to understand the full potential of its benefits in terms of the OTT sector in India. Nevertheless, this next-gen wireless connectivity is expected to encourage viewers to stream more and stream often. OTT services are set to thrive in such an era of advanced connectivity ultimately making it the primary source for digital content consumption.