All operators face the challenge of competing for eyeballs in an increasingly cluttered and fragmented video world where the same content can often be viewed across a variety of platforms and formats. Original content, access to premium live services and personalization have become critical differentiators even if any given operator does not have to offer all of these to the same degree.

The landscape has changed a lot since Netflix first made its mark by harnessing intelligent recommendation to a fare comprising largely old TV shows and second line movies. It gained its prominent position in the first years after launching streaming in 2007 partly through lack of competition, coupled with being able to secure online rights quite cheaply at that stage. But it then pushed onto the next tier through a combination of original content and deeper personalization. Two key moves both came in 2013 with the renewal of its earlier "Profiles" feature and move into original content with the release of the first House of Cards series. This combined with further iconic series such as Orange is the New Black and most recently The Crown have propelled Netflix into a household name that has helped generate subscriptions worldwide. Then the ability for an account to have up to five profiles gave Netflix much more user data and enabled it to personalize the service, allowing favorites to be added and delivery of individual recommendations. This led to the situation where almost 80 percent of what people watch on Netflix comes from recommendations made by the service.

This is the backdrop to the current highly competitive OTT landscape, where Netflix itself is constrained from taking its next step into more live programming by its enormous content outlay. This has led the company into $20 billion debt, according to a report late July 2017 in the Los Angeles Times, after committing about $6 billion to original content this year along with an unspecified licensing budget for third party TV shows. Its net cash outflow will increase to $2.5 billion this year, up from $1.7 billion in 2016, which is not sustainable forever.

Meanwhile rivals have been stepping into live programming, with Amazon for example buying up a tranche of sports rights worldwide such as a deal to show ATP World Tour tennis in the UK apart from the four grand slams, as we reported recently. Mostly these are second tier rights but they play well to a distributed global audience and are a likely prelude to bids for major sporting properties after assessing these earlier first dips in the water.

Other major players are also entering the fray or stepping up earlier smaller scale activities, such as regional Telcos. A notable example is Hong Kong’s PCCW which provides broadband services across parts of Asia-Pacific, which is a hot bed of growth for OTT video. It came as no great surprise therefore when PCCW announced early in August 2017 that three investors, Hony Capital, Foxconn Ventures and Temasek, had together injected $110m into its OTT arm to be spent partly on streaming and encoding technologies to improve the viewing experience and partly on original productions for the local markets.

“Our focus on content, pricing and technology that are locally relevant in various markets, together with our fast-tracked rollout across the region, has enabled Viu to become a leading OTT video service in Asia,” said Janice Lee, Managing Director of PCCW Media Group. PCCW OTT’s video services are available in 24 countries. These include video streaming services under the “Viu” and “Vuclip” brands as well as a music streaming service under the “MOOV” brand.

Launched in October 2015, Viu has over 12 million monthly active users as of June 2017. The service operates an ad-supported tier and a premium subscription tier of service with more features. Viu is available in 15 markets including Hong Kong, Singapore, Malaysia, India, Indonesia, the Philippines, Thailand and the Middle East countries of Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Vuclip provides web-based and short-form content video services under the “Vuclip” brand in 19 markets including India, Southeast Asia, Middle East, Africa and other emerging markets.

The other major emerging sector in OTT is social media, where the thrust is to exploit the well-established relationships with users for recommendations and play to the strengths of the platform by stimulating greater engagement through interactivity. As everywhere original content is also an important part of the mix and the big players can afford to play hard here, as Facebook has done through its new multi-platform app called Watch. This provides access to a recently expanded offer of premium content, including live sports, with greatest activity in the US at this stage.

For example, Facebook struck a deal in May 2017 with Major League Baseball to show 20 of the league's games live this season in the US, that is one game a week. Then just a month later in June 2017 Facebook signed a deal with Fox Sports to stream live matches to US users from the UEFA Champions League, Europe’s top club soccer tournament, during the 2017-18 season. This includes two live matches per match day in the group stage, four rounds of 16 matches and four quarterfinal matches, some exclusive to Facebook and Fox Sports Go, with others simulcast on TV.

The new Watch app also allows users to discover videos outside their feed more readily and follow shows created by artists, brands and publishers. It replaces the Videos tab within the Facebook mobile app that launched in 2016, making it much easier to discover content that is trending or being watched by friends, with recommended videos also available under lists such as 'most talked about' and 'making people laugh'.

This takes Facebook into YouTube territory but also towards a more complete TV offer which could combine original shows with and a growing portfolio of live TV including sports. But Facebook is also aiming to shape the course of TV as a service by making it more interactive and encouraging users to engage both with each other via the platform and directly with the content where relevant. Facebook is also playing around with different forms of short form content production designed to stimulate the medium and find out what works best. It is also encouraging production offering the carrot of revenue from ad breaks, here much like YouTube.

Given the huge force of these platforms traditional operators and broadcasters may well have to seek partnerships as Fox has done with Facebook over some sports rights. Facebook after all has more extensive data about consumers' habits that most operators can ever hope for, while many public service broadcasters such as the BBC are only just embarking on the viewer analytics game by encouraging sign on to their free online services.