he Dutch OTT Market Monitor provides a comprehensive overview of the Dutch over-the-top services market. The OTT market is by nature a global market, dominated by US providers such as Google, Facebook and Netflix. The report describes this international OTT market, including a classification and an extensive analysis of the current business model trends.
Classification
Our classification distinguishes between communication (incl. social networking), entertainment (incl. gaming) and other web services.
The so-called over-the-top (OTT) market is really not different from the internet services market. The name (probably) derives from the delivery mechanism, i.e. the user’s broadband connection. At the same time, OTT juxtaposes the internet services to the operator’s own managed services (voice, SMS, TV, VOD).
OTT service delivery opened the floodgates by drastically lowering the entry barrier. Any internet company, and indeed the operators themselves, can provide services, with limited infrastructure demands. This led to intense competition. Large internet conglomerates arose, including Google, Facebook, Amazon and Microsoft, in part based on takeovers:
- Google: YouTube, Android, DoubleClick, Waze
- Facebook: WhatsApp, Instagram, Oculus
- Amazon: Twitch, IMDb, Lovefilm, Audible
- Apple
- Microsoft: Skype, LinkedIn
Smaller, specialised firms are struggling to survive (Yahoo, Twitter). Some may end up in the hands of the conglomerates or grow into new conglomerates (Airbnb, Uber, Snap, Pinterest).
Operator impact
Telecoms operators have been severely impacted by the launch of numerous voice, text, TV and video based services. These may not be substitutes in the strictest sense of the word, because of different sets of functionalities. But Skype, FaceTime, WhatsApp, YouTube and Netflix have become household names in the fields of communication and entertainment services.
Still, operators have also benefitted. After all, broadband has grown into an enormous and very profitable business. The speed of innovation brought to the telecoms sector by the internet companies has been a boon for service providers and consumers alike.
The analysis of the Dutch market focuses on app usage for the mobile segment and on cord cutting issues for the fixed-line segment. Social networking, Facebook and Netflix are among the most popular apps.
There is a special focus on the traditional operator point of view, who in one way stands to lose and in another benefits from the rise of the OTT sector. After all, traditional operator managed services are at risk, but the broadband and device markets are major beneficiaries.
The report helps to understand possible operator responses to the OTT opportunities and threats, as well as a number of regulatory implications. Operators are still struggling to find the right strategy, a mix of both defensive and offensive measures. We have noticed increased operator efforts on the OTT entertainment market, but not on the communication market. Communication realistically is a commodity today, whereas entertainment appears to be more of a differentiator.
