TV Everywhere initiatives are working for service providers as they strive to defend their markets and market share from newer, smaller Over-the-Top (OTT) Internet video service providers — at least to some extent, according to market research firm TDG. More than 30 million households – a third of PayTV subscribers – will be using operator-provided TV Everywhere (TVE) services by 2016, according to TDG’s latest analysis.
“The logic is straightforward,” notes Colin Dixon, TDG Senior Partner and author of the new report, entitled “TV Everywhere Market Update, 2012.” “If consumers can access their PayTV services on their PCs, pads, and mobile phones, they should be less likely to use competitive services like Netflix or Hulu and thus less likely to ‘cut the cord.'”
While the reasoning is straightforward, the actual results are uncertain, as use of OTT services are expected to continue growing rapidly over the next five years. “Though having 30 million households actively using TVE services by 2016 is not insignificant, by that same time OTT video services will be used by nearly 90 million U.S. households. That’s the reality that PayTV operators are facing.”
A Middle of the Road Outcome
Content providers and carriers will likely be engaging in more push and pull efforts as some carriers will try to extend existing carriage arrangements to cover Net-connected devices without content provider sanction, and some content providers will try to bypass carriers by going direct to consumers. A middle of the road outcome where “content providers may be able to frame the end-user experience but operators will provide a branded, authenticated ‘gateway’ through which consumers must enter,” appears to be the “most fertile” scenario, Dixon added.
As a result, Dixon expects that Operator, or “Op-TVE” services will dominate the TVE market space in coming years. Content Provider, or “Con-TVE” services will also play a role in the market’s growth at the early stages, but will “quickly be absorbed” by Op-TVE services, he asserts.
Dixon also foresees the emerging multi-screen, multi-source entertainment and news environment shifting from a primarily “content-centric” model to a “viewer-centric” model. In the former the viewer is actively engaged in finding content, while in the latter “the content seeks to find the viewer.” When multiple sources appear on viewers’ connected TV screens, on-demand availability will matter more than the source of the content, according to Dixon.