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Falcon Media to help MSOs gain ground against OTTs

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MUMBAI: The dynamics of the over-the-top (OTT) segment in India are about to change. Even as OTT content is replacing people’s desire for TV, Falcon Media House (Falcon) and Media Nucleus are working towards ensuring that cable channels effectively compete with OTT players.

Falcon is looking to join hands with multi-system operators (MSOs) in the country to enable cable channels to stream on a new OTT service. The idea of this collaboration is to empower MSOs to gain a stronghold into the current digital market.

Media Nucleus, with which Falcon has partnered in India, has enabled more than 5 million subscribers in India on the digitisation front working with top MSOs. It plans to extend the value proposition to existing Indian clients in the portfolio by offering a buffer free, seamless video experience using solutions from Falcon’s recent acquisition, Quiptel Technology (Quiptel). Media Nucleus will handle the market while Falcon will provide the live mega platform for cable operators.

Falcon CEO Gert Rieder and Quiptel CEO Sandip Sarda were in India to scope out the market. As things stand, Asia, Africa, and North America are the main geographies of focus for them.

In an interaction with Indiantelevision.com, Sarda discussed their venture and the benefits to MSOs. He says, “I think we are bringing a disruptive technology. We are going to make things easier for content providers, even the small operators, to reach the market. Our concern is how will cable operators survive as they are challenged by OTT and how can we give them a parallel system to provide services to their existing customers so that they can watch cable on the go. We want to empower small content providers.”

Rieder believes that as the traffic is moving to mobile devices, they are not only helping cable operators but also broadcasters who want to see themselves in the digital space. They will get a bigger footprint and advertising revenue from that.

Earlier in the year, Falcon acquired Quiptel for 9.5 million pounds. Talking about the acquisition, Rieder says, “We have acquired Quiptel because it has unique technology and unique software, which allows the use of public internet for video streaming. Quiptel has multiple patents that we own and we enable distribution of video on public internet by giving a certain level of quality and low cost of production. We are working on how to create an independent platform that enables people to reach out to the audience.”

The surge in video on demand (VOD) in India is pegged at 78 per cent, according to Accenture 2017 Digital Consumer Survey, which reports this as the growth in the number of consumers of VOD services in India. Due to high cost of entry, however, the market has largely seen the arrival of large players and broadcasters such as Star India, Colors, Balaji Telefilms in addition to Netflix and Amazon Prime.

According to estimates, by 2020, more than 50 per cent of internet traffic will be from mobile devices and more than 80 per cent of all internet-related traffic will be video related.

Looking at the current scenario, Rieder and Sarda believe that audience is moving away from linear TV. Says Rieder, “The most advanced markets in the world such as the US and Europe have seen a drop of 10 to 15 per cent per year in cable subscription because nobody wants to pay 100 dollars a month for 60 channels when you only watch two of them. The same trend is coming to India in spite of relatively cheap cable connection services. India will see 100 million unique users daily on streaming services by 2020.”

The impending resurgence of cable operators vis-à-vis OTT players is what led to them to enter India, a priority market. Sarda says, “We see huge content consumption but also barriers to entry because of the cost and existing big players with deep pockets. We are working on enabling the niche classes to tie-up not just for the Indian market but for Africa, the Middle East and the UK, where Bollywood is popular.”

Sarda believes that the challenge is to sustain people’s interest when videos start to buffer leading to lower time spent. “We are eradicating the buffering issue and lowering the cost for MSOs. So that in future, every dollar they make, they don’t need to pay 80 cents to the technology provider.”

When a new internet user joins the queue to watch the same video, the video starts to buffer. If buffering builds up, Quiptel’s technology takes users to a different streaming route for a seamless experience. There are up to 16 routes to divert the traffic.

Sarda says that OTTs will end up usurping cable TV players’ market share if they don’t broaden their horizons. For cable providers, hooking up new users is a big cost. “We will provide cable operators with our software and apps that will enable them to reach out to anybody and anywhere as long as they have rights. So, a consumer from Delhi travelling out of the city can watch his local cable channel through any hand-held device.” The glass-to-glass latency for streaming TV channels live would not be more than 45 seconds.

He points out that if existing OTT players reduce their distribution costs, they can stop bleeding and rake in the moolah. Moreover, the drifting viewership doesn’t allow advertisers to confidently place their bets.

Rieder and Sarda are not shy about discussing the competition. They say that a content delivery network such as Akamai could be their competitor as well as a customer. Clearing the confusion, Sarda says, “An OTT service provider would need Akamai. A lot of our people don’t use a content delivery network (CDN) because of our special routine mechanism to distribute video packages. The only reason when people might need a CDN is when they get a heavy load and can’t offload it. Akamai could buy our platform to send its stream from wherever its network ends to users' mobiles.”

As MSOs and OTTs go toe to toe once again, it will be interesting to see how MSOs, armed with new technology, fare against the surge of OTTs in round two.

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