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OTT is “overhyped at the moment”
Chris Forrester
Whether the benefits of a recession are just felt in an uptick for pay-TV operators is a good question, but most US pay-TV operators are having a good 2010, at least so far.
Data from Strategy Analytics says that 1.7m extra pay-TV subscribers signed up during Q1 this year. And this growth was despite the impact of so-called ‘Over the Top’ services from the likes of Hulu, ******* and other video service suppliers that depend on broadband connection for their supply link into the home.
The Strategy Analytics report, “Over-The-Top vs. TV Everywhere: How Disruptive is OTT to the Pay TV Business?” concludes that while the reaction to OTT has been perhaps overhyped, online distribution does pose a potential threat to the traditional pay television model. Nevertheless, pay TV providers such as Comcast, Dish, DirecTV and Verizon appear unfazed, as they post positive net subscriber additions on a quarterly basis.
“Over-the-top video services—both ad-supported and paid—are widely viewed as a threat to pay TV operators,” said Jia Wu, Analyst at Strategy Analytics Digital Consumer Practice and author of the report. “However, despite the disruption caused by OTT, US pay TV providers continue to grow both revenues and subscribers.”
The threat of OTT must not be completely ignored, says the study. Survey research conducted by Strategy Analytics in 2009 showed that US consumers perceive a relatively low “value for money” for pay television services. The pay television industry is banking on its “TV Everywhere” initiative, aimed at offering subscriber content on multiple screens, to counter the threat of OTT, according to the report.
“While the adverse effects of OTT to-date may be minimal, one should not overlook the threat it poses to traditional pay television models in the future,” noted Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service. “OTT services can potentially capitalize on pay TV’s biggest shortcomings, namely a lack of flexibility in selecting channel packages, and a low perceived value for money.”
Chris Forrester
Whether the benefits of a recession are just felt in an uptick for pay-TV operators is a good question, but most US pay-TV operators are having a good 2010, at least so far.
Data from Strategy Analytics says that 1.7m extra pay-TV subscribers signed up during Q1 this year. And this growth was despite the impact of so-called ‘Over the Top’ services from the likes of Hulu, ******* and other video service suppliers that depend on broadband connection for their supply link into the home.
The Strategy Analytics report, “Over-The-Top vs. TV Everywhere: How Disruptive is OTT to the Pay TV Business?” concludes that while the reaction to OTT has been perhaps overhyped, online distribution does pose a potential threat to the traditional pay television model. Nevertheless, pay TV providers such as Comcast, Dish, DirecTV and Verizon appear unfazed, as they post positive net subscriber additions on a quarterly basis.
“Over-the-top video services—both ad-supported and paid—are widely viewed as a threat to pay TV operators,” said Jia Wu, Analyst at Strategy Analytics Digital Consumer Practice and author of the report. “However, despite the disruption caused by OTT, US pay TV providers continue to grow both revenues and subscribers.”
The threat of OTT must not be completely ignored, says the study. Survey research conducted by Strategy Analytics in 2009 showed that US consumers perceive a relatively low “value for money” for pay television services. The pay television industry is banking on its “TV Everywhere” initiative, aimed at offering subscriber content on multiple screens, to counter the threat of OTT, according to the report.
“While the adverse effects of OTT to-date may be minimal, one should not overlook the threat it poses to traditional pay television models in the future,” noted Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service. “OTT services can potentially capitalize on pay TV’s biggest shortcomings, namely a lack of flexibility in selecting channel packages, and a low perceived value for money.”