Internet-enabled TV devices, including smart TVs, connected Blu-Ray players, game consoles, and streaming media players are the key devices to watch. Already, about 17 million U.S. households currently own a connected TV, and ownership of streaming media players has nearly doubled since the end of 2010.
Only a fraction of consumers that own an Internet-capable TV device actually connect those devices to the Internet to become over-the-top video consumers, In-Stat says. In part, technological barriers are an issue, one might argue. The in-home video environment has become more complex over the last decade, not simpler.
But that would less an issue if over the top services provided high value for consumers. One can argue that, at present, the value is not high enough to massively change end user habits.
In any content-driven business, it is the value of the content and its variety, not just the ease of use, which ultimately is decisive. People can cope with quite a lot of limitations to get access to something they value.
But in the old debate about whether content or distribution is “king,” one would have to concede that there ow is a very-strong argument that content is, once again, king.
In-Stat believesNetflix and other suppliers are shifting to a more TV-centric model (as opposed to the “mostly movies” approach) and will soon be competing directly with HBO, Showtime, and Starz.
That means TV content providers hold the keys. Without jeopardizing existing and important revenue streams, TV content providers will seek to maximize revenues from new over the top channels. The caveat is that they will seek to avoid cannibalization.
And so content access now is the gating factor.
