OTT Spells Opportunity for Nearshore

The growing over the top (OTT) media services market is opening up nearshore opportunities for companies like Wizeline, which is setting up Network Operations Centers (NOCs) in both Asia and Latin America to meet demand.

OTT

By most accounts, the over the top (OTT) media services market will experience significant growth in the years to come. Providers like Netflix, Hulu, Amazon Video, and many others, are producing large amounts of content, and jostling for dominance. This is providing opportunity for companies like Wizeline, a San Francisco-headquartered software and services company with a strong nearshore presence in Mexico.

“The industry for OTT technology providers is heating up,” says Bismarck Lepe, Wizeline’s founder. “The gap left by the Bamtech, Neulion, Deltatre acquisitions, paired with the fact that more people are consuming media online, brings Wizeline a unique opportunity.”

Lepe is no stranger to this market, having worked for Google, where he developed new monetization techniques for YouTube. More significantly, back in 2007, along with his brother Belsasar Lepe, and Sean Knapp, a friend and colleague from Google, Bismarck founded Ooyala, a video software and services company. Ooyala was acquired by Telstra in 2014, and then in February of this year it was bought by Brightcove.

“The market is different now, in that there are best-of-breed solutions,” says Lepe. “As a result, our approach is going to be very services- and consulting-driven.”

The Nearshore Advantage

Wizeline first established itself in Mexico back in 2014. Today, the company’s new campus in Guadalajara is home to 450 Wizeline employees, as well as 150 individuals within StartupGDL, a non-profit founded by Bismarck Lepe committed to making Guadalajara a global leader in high tech innovation.

“For the Latin American media market we are incredibly well-positioned,” says Lepe. “There are not only all of the media companies in Latin America, there are also those companies in USA that focus on the Spanish-speaking market.”

Wizeline’s ability to tackle the OTT opportunity will be enhanced by its new facility, which is ~97,000 square feet (9,100 square meters) – three times the size of the company’s previous building. The space has 63 meeting rooms, ~16,000 square feet (1,500 square meters) of open terrace, numerous wellness and health spaces, as well as a gym, daycare, nursing room, and doctor’s office.

When announcing the opening of the new facility, Raul Lopez, Head of Construction & Facilities at Wizeline, made it clear that this kind of investment isn’t only about buildings – it’s about showing commitment to a growing workforce.

“As the team grows, we need a space that reflects the diversity of our team and its needs,” said Lopez. “Expanding our workspace to fully support the Wizeline vision was a natural next step.”

This new facility has 1 GB of dedicated Internet fiber – a necessary piece of infrastructure for a software and services company committed to the OTT market.

The OTT opportunity

“We know that ratings are declining and cable subscriptions are declining,” says Jared Lake, VP Digital Strategy at Ocean Media, speaking at the TV & Video Insider Summit. “But we also know that screen time is increasing. And OTT is where we believe a lot of these consumers are going.”

That puts a lot of pressure on the market to deliver an OTT experience that is personalized and straightforward, allowing for cross-device viewing. The experience also has to be extensible, configurable, with a high quality of service.

“The thing about OTT is that you need a tremendous amount of configuration and customization,” says Lepe. “All media companies are different – they are different internally and also in how they engage with their customers. Consequently, templated solutions aren’t going to work.”

Cloud providers have now commoditized a lot of what online video platforms (OVPs) formerly provided. As a result, the play for a company like Wizeline is to provide the connective tissue between technologies like Google Cloud Platform (GCP), Amazon Web Services (AWS), Convivia, Azure, WSC Sports, and Akamai.

“One of the challenges in the OTT space is the fragmentation,” says Lake from Ocean Media. “The benefit is that, from a consumer perspective, OTT is much better than traditional media.”

However, many media companies have legacy technology that pre-dates OTT. As a result, they aren’t going to migrate to a full cloud stack overnight, but are instead involved in a longer strategy that involves porting legacy technology over to the cloud. And that spells opportunity for those technology companies that are able to help out.

“We estimate that the market in terms of revenue from subscriptions, advertising, and releases, is well over a trillion dollars a year, with the bigger companies dominating,” says Lepe. “From our perspective, we believe that the vendor opportunity is now at $500 million and growing.”

To address the market, Wizeline plans to set up Network Operations Centers (NOCs) in both Asia and Latin America. These NOCs will support streaming for on demand and live events in the Sports and News sectors.  Wizeline already does a significant amount of business in the media space, counting 21st Century Fox, Wall Street Journal, and Barron’s among its clients, with OTT now being a strategic focus of the company’s media practice area.

“We’ve hired seasoned professionals, engineers, product managers, and sales people from media companies here in the United States to help lead the teams in the media practice,” says Lepe. “These engagements will be mostly consulting-based, with Wizeline customizing and personalizing applications to enhance the customer experience.”

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By assuming a multi-cloud and multi-region strategy, Wizeline is determined to make its approach as agnostic as possible. Lepe himself is something of a contrarian when it comes to how he sees the role of technology within media companies.

“Not every company is a software company,” he says. “Software is becoming a commodity, like electricity, but companies don’t produce electricity. Instead, they should work with companies that can build platforms to interconnect to different solutions.”

That makes sense for media companies that are trying to get their OTT services from four nines to five nines. It also appeals to the SME market, where SaaS solutions will be enabled by API-driven frameworks that support a business case for a market that is both highly competitive, and dominated by big players.

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