The Writing On The Wall

OTA and OTT are competing content distribution solutions. While most people would agree that OTT will win and become the platform that serves most of the media and entertainment (M&E) industry’s needs, the timing of this transition is hard to predict. For over 10 years some people have been predicting that OTA would end within the next 5 years and have clearly been proved wrong. OTA is known for its efficient delivery to reach very large audiences, especially for live video (and radio), and there are compelling reasons why it will exist at least into the 2040s. What is probably easiest to agree on for now is that OTT and OTA will co-exist for many years to come.

While these solutions compete, and serve our media consumption demands, they both consume energy. The race for sustainable solutions for the benefit of our planet forces us to evaluate these two solutions to understand what the general shift from OTA to OTT means. This is a serious subject for the M&E industry, to which this article cannot do full justice. Because this article is part of the editorial series that looks at OTT, it is focused on the content distribution side of the M&E value chain (as opposed to content production, which can serve multiple distribution chains), and reviews latest thinking and information from the distribution side of our industry.

Broadcaster Multi-Platform Delivery And Achieving NetZero

OTT, as a general-purpose internet-based delivery platform, is making gains in all areas of supplying media to consumers versus the traditional line-up of terrestrial broadcast, satellite, cable, and IPTV platforms. OTT is seen to offer more convenience, flexibility, mobility, personalization, and integration with other internet-based activities.

Pureplay OTT streamers have been focused on building their M&E market share for over a decade. Meanwhile, Broadcasters have been building up their OTT services, while continuing to focus most of their effort on OTA services. But a tipping point is now visible. Many leading broadcasters are publicly stating their move to “OTT-first” for content development, program scheduling, and audience engagement.

National broadcasters, especially public service broadcasters, bring specific responsibilities with them that the pureplay streamers are not regulated to comply with (yet). One specific responsibility is to achieve NetZero targets that governments mandate. While some pureplay streamers are clearly supporting this very important objective for the planet (e.g., DAZN, who recently joined the Greening of Streaming association), the public broadcasters are working hard to support their national sustainability objectives.

Broadcasters, unlike pureplay Streamers, must think about OTA and OTT in almost equal measure, with a general emphasis on OTA given it consumes more of the current content distribution budget and is the platform on which the majority of viewing occurs. Broadcasters have video and radio channels, some of which run on decades-old technology (e.g., long wave radio). Broadcasters also have public service obligations to fulfil. So, their ability to achieve NetZero targets requires looking deeply into their multi-platform distribution model, which involves working with a range of distribution partners.

OTA broadcasting in developed broadcasting countries has been generally “at capacity” for some time with the current level of SD/HD channels. Unless many more channels are added or resolutions increase (e.g., HD to UHD), we should not need to expand OTA network capacity. And, of course, because it is broadcasting, with capacity installed to reach the whole population, then a change in viewership levels will not increase or decrease the deployed capacity. On the other hand, OTT consumption is growing and is a key driver of telco and cable network expansion. These IP streaming networks are expanding in different ways in different countries, with different network topologies, ownership models, and investment policies. Core network expansions and Access network expansions are happening in different ways in different countries (use our site search to see previous OTT Series articles referring to Fastweb in Italy and BT Openreach in the UK). But telco and cable networks are not the only thing that must expand for streaming. The CDN (content delivery network) infrastructure must be in place to ensure video does not saturate network capacity – some estimates suggest a country like the UK might need to expand its existing CDN capacity by at least 10x-30x only for video delivery for the M&E industry.

Content distribution is a technical domain, utilizing transmitters, servers, networks, and various types of consumer equipment for delivering and viewing the content. This means we can be quite precise about the energy consumption of content distribution, although, as this article will show, it is a complex web of equipment and shared usage that needs to be closely studied. And it is clear that we need to improve our shared understanding in order to collaborate effectively at engineering, commercial, and political levels to make good decisions about how we sustainably distribute content in the future.

A Case Study Of OTA And OTT

The example used in this paper is from the UK, which has similar market characteristics with many other countries. Ofcom (the UK communications regulator), the BBC, ITV and Channel 4 (the public service broadcasters), and  Arqiva (the UK’s broadcast network operator) are the leading actors in the market that are tasked with NetZero objectives, and that must consider significant usage of both OTA and OTT distribution models. Each country has its own set of equivalent organizations operating in similar ways.

The BBC, ITV and Channel 4 are mature OTT streaming providers with a significant percentage of total viewing coming from OTT. As an average, they had about 10% of their total viewing on their OTT services in 2021. And while Arqiva is known as the UK’s broadcast network operator, managing over 1100 transmitter sites around the country that deliver television and radio services to more than 95% of the UK population, it has also very recently announced a new, strategic activity focused on how to achieve “broadcast-grade streaming” that meets broadcaster objectives for performance, cost, security, and sustainability.

This article also references the work of the Greening of Streaming, a new industry-wide initiative founded in the UK, and already boasting members like  Akamai, AMD, DAZN, the EBU, Intel, MainStreaming, and more. The goal of the new industry body is to put a laser-focus on ensuring OTT can fulfil its sustainability duties.

Ofcom recently commissioned a report, delivered by Carnstone, that studied and compared the energy consumption and CO2 emissions from DTT (Digital Terrestrial Television, which will now replace the use of the OTA acronym in this article) and OTT. The report was related to video delivery (i.e., not radio) in the UK in the year 2021. The high-level scope of the report is explained by the diagram in Figure 1.

The report refers back to methodology used in previous studies, centered on an attribution approach, that allocates a % of the infrastructure used for delivering services to those specific services. In DTT, this refers to the energy used for broadcast towers, multiplexers, aerial amplifiers, set-top boxes, and the television. In OTT, this refers to the data centers, CDNs, telecommunication networks, routers, home networking equipment, set-top boxes, and various viewing devices (SmartTV, laptop, tablet, smartphone). In the attribution approach, the shared nature of the networks delivering the content means that the larger the audience, the lower the energy consumption per “viewing hour”, which is the unit of measure that allows tracking of relative energy consumption over time.

Calculating Viewership And The “Device Hour”

The report starts with the UK’s viewing habits from 2021, considering hours of content viewed on average by each person in the UK (aged 4+ years). See Figure 2.

The report confirms the following data points that are used to calculate the important “Device Hours” metric that is used heavily by the modelling that follows. Referring back to Figure 2, “DTT” in the Carnstone report is defined as Live TV plus Recorded Playback, while “OTT” is defined as SVOD plus BVOD. The numbers below should not be added together. They describe the figures for DTT and OTT independently.

The “Wh Per Device Hour” Metric

The report explains that the key unit of measure for energy consumption is the Watt-hour (Wh) and the key metric for energy consumption from viewing media content is the Wh per Device Hour. This metric measures how many watts have been consumed to deliver the video content for each hour that a viewing device is displaying it. The calculation of energy consumption by Carnstone results in two headline figures as shown in Figure 4:

In the UK, in 2021, OTT-based viewing per device hour was therefore 48% more energy hungry than DTT-based viewing per device hour. In 2019’s analysis (source: Carnstone 2022) the DTT result was 75.9 and the OTT result was 126.3, which made OTT 66% more energy hungry. The gap is closing, which makes sense with the use of the attribution method which creates a relative result for energy consumption in terms of hours viewed and device types used across the shared infrastructure that is delivering the content.

Part 2 will continue the analysis of the 2021 data, digging into detail about energy consumption and C02e (carbon dioxide equivalent) emissions, and considers a future perspective of OTT-only viewing.