Three Network Convergence and OTT TV: Old Issue and New Battle

TitleThree Network Convergence and OTT TV: Old Issue and New Battle
Publication TypeConference Paper
Author(s)Wu, R., and G. Leung
Affiliation (1st Author)The University of Hong Kong
Section or WGCommunication Policy and Technology
DateSat 29 June
Slot CodeCPTS1b
Slot Code (Keyword)CPTS1b
Time of Session9:00-10:30
RoomQ121
Session TitlePANEL:The Impact of the Emerging OTT Video Services on the Users, the Content Providers and the Existing Media Platforms in Asian Countries
Submission ID5793
Abstract

Panel Title: The Impact of the Emerging OTT Video Services on the Users, the Content Providers and the Existing Media Platforms in Asian Countries     Three Network Convergence and OTT TV: Old Issue and New Battle Richard Wu & Grace Leung The University of Hong Kong  richwswu@hku.hk   Chinese University of Hong Kong  grace_llk@hotmail.com  Hong Kong   Abstract   According to the report of CNNIC in January 2013, China has 564 million netizens, and its penetration rate of internet is 42.1%. Amongst the netizens population, 74.5% of them are using smart phones to connect with the Internet. Viewing video programs online is the fifth most common function for the Chinese netizens. The total user of video programme is 371 millions, accounting for 65.9% of the netizen population in 2012. These figures show that China has a strong foundation for the development of OTT TV.  At present, there are high quality streaming video content available from the national CCTV and other popular OTT TV service providers like PPTV, QQLive and Youku.  While broadband penetration rate remains low at the moment, the country has introduced a series of ‘Broadband China’ project to speed up the broadband network development, thereby facilitating the development of OTT TV.   Disregard such a strong foundation, the development of OTT in China is nevertheless limited by its licensing system. At present, OTT TV represents the latest battle field between the telecommunication and broadcasting ‘systems’ in China. In November 2011, the SARFT secured the licencing power of OTT TV service pursuant to Document 181. At present, only seven broadcasting organizations are permitted to launch the OTT TV services. However, these players will not be able to develop OTT TV alone because the broadcasting sector does not have advanced national interactive networks to deliver television programs. Even though the broadcasting sector controls the licencing of the OTT TV, it requires the technical support of the telecommunications sector.   As a result, OTT TV represents a deepening of co-operation between the broadcasting and telecommunication sectors in China, which is an integral part of the three network convergence policy. At the end of 2011, the number of OTT TV subscribers has already reached 14 millions. Its growth momentum has exceeded another convergent technology of IPTV, which only secured 13.5 million subscribers after six years’ development. All players in the communications sector, including the telecommunication and internet operators, are keen to develop this new convergent service. The broadcasting sector also regards this service as a killer’s application to rescue its stagnant development in the digital television service market.   We cannot separate the development of OTT TV from the unique political, economic and social environments of China. In this paper, we trace the development of OTT TV against the backdrop of the three network convergence policy. We explore its opportunities, threats and the relationship between different stakeholders. We argue that convergent technologies fall into the same pattern of political struggle between the broadcasting and telecommunications ‘systems’ and the new OTT TV service is likely to follow such old pattern. Even though the new service will draw the two sectors closer, the broadcasting sector adopts an operational model that will eventually exclude the telecommunication sector from the OTT TV market.

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