The Carrot and Stick Approach to OTT Content

The industry is in a dynamic period and the results of our recent survey, OTT Challenges and Opportunities, are largely positive. More than 95% of respondents recognize the strain that high-bandwidth applications — such as OTT services — put on networks, and have started upgrading their networks or plan to in the next 12 months. Many operators have already deployed strategies to cope with the popularity of OTT content, although there are some interesting regional differences. My colleague Miranda has summarized the survey findings but the question remains — is it better to punish high-bandwidth users with caps and fair usage policies or to provide incentives such as service add-ons like boosted speeds or unlimited streaming?

Overall, more providers are currently adopting the “stick” approach, with bandwidth caps and fair usage policies by far the most popular strategies for combating OTT. But this is changing. More and more providers are recognizing the value of offering a “carrot” to subscribers — so expect to see more service add-ons and even proprietary OTT services in the near future.

Clearly, there’s no single answer to the OTT content challenge but a measured approach that puts your customers first will help you come out on top. One thing’s for sure — now is the time to rethink traditional business models and consider how to add value for subscribers. Better bandwidth monitoring and management tools will help you identify usage trends, while the ability to develop and quickly roll out new customized service offerings is necessary to remain relevant to your customers. Armed with the right information and tools, you can ensure customer satisfaction and loyalty in the long run.