The growing threat from over-the-top providers such as Netflix and YouTube has wireless operators on the defensive. Consumers are increasingly watching video content on their smartphones and tablets, rather than their TVs, and many are using services such as Netflix, YouTube and Hulu to access that content.
According to Nielsen's most recent cross-platform report, the amount of time Americans spent watching video via traditional TV rose less than 1 percent year-over-year as of third quarter 2012. Yet time spent watching video via the Internet increased 37 percent, while minutes spent by mobile subscribers watching video on a mobile phone rose 25 percent during the one-year period.
Of course, the big dilemma facing operators is that these services eat up valuable bandwidth on the network, which cuts into their bottom line. But there are alternatives. Some operators are deploying platforms and products that promise to make OTT content better and easier for consumers to access and will help operators monetize these content offerings.
Rich Communications Services or RCS is one solution operators are deploying in an attempt to circumvent the OTT threat. MetroPCS (NYSE:PCS) is the first U.S. operator to commercially launch RCS, under the GSMA's joyn brand. According to MetroPCS, the service is humming along just fine despite the fact that Deutsche Telekom is said to be experiencing technical difficulties in Germany. DT has indefinitely delayed launching joyn there.
The jury is still out on whether the GSMA's RCS/joyn initiative will be successful. Although the trade group maintains that the service is gaining traction with 19 vendors offering RCS on a hosted basis others say that the RCS effort is too little, too late and doesn't solve all the challenges presented by OTT providers.
FierceWireless' latest ebook, "Minimizing the OTT Threat," takes an in-depth look at the threat from OTT providers, and examines how operators are making progress in delivering content to their customers. To download this free ebook, click here. --Sue