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TDG: A Third of PayTV Subscribers to Use 'TV Everywhere' Services by 2016

(January 10, 2012)

FRISCO, TX -- (Marketwire) -- 01/10/12 -- To defend against the encroachment of over-the-top (OTT) broadband video services like Netflix and Hulu Plus, incumbent PayTV operators are launching so-called 'TV Everywhere' or 'TVE' services. These services allow residential PayTV subscribers to access many of the same channels they enjoy at home on their net-connected devices, wherever they may be.

According to TDG's latest analysis, by 2016 more than 30 million households will use operator-provided TVE services to access their favorite video programs on their net-connected devices.

"The logic is straightforward," notes Colin Dixon, TDG Senior Partner and author of the new report. "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.'"

Will this strategy work? Perhaps, argues Dixon. "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."


In regards to TVE market dynamics, a few major content providers will choose to go it alone and sell direct-to-consumer (that is, without operator sanction), while some operators will attempt to extend existing carriage agreements to cover net-connected devices (that is, without content provider sanction). In most cases, the middle road will be most fertile, meaning content providers may be able to frame the end-user experience but operators will provide a branded, authenticated "gateway" through which consumers access the content. In other words, if a consumer does not subscribe to the content through a PayTV operator, TVE access will not permitted.

For these reasons, Dixon expects that Operator or "Op-TVE" services will dominate this market space. Though Content Provider or "Con-TVE" services will play a role in the early market, they will quickly be absorbed by Op-TVE services.

According to Dixon, this multi-screen, multi-source paradigm will gain traction over the next few years, due primarily to a shift in viewing models, from a "... content-centric model -- where the viewer seeks to find the content -- to a viewer-centric model -- where the content seeks to find the viewer." In this quantum video universe, multiple sources appear on the TV screen and on-demand availability matters more than the source of content.

TDG's latest report, TV Everywhere Update, 2012, is now available for purchase. The report offers a detailed analysis of the various vendors and operators active in the U.S. 'TV Everywhere' space, as well as a discussion of key market drivers and inhibitors, and annual forecasts of household use through 2016. For more information about this new report, please contact our Research Services Team at 469-287-8050.

About The Diffusion Group

TDG provides actionable intelligence on the quantum shifts impacting consumer technology and media behaviors. Since 2004, our market research and advisory services have helped hundreds of technology vendors, media companies, and service providers understand how consumers access, navigate, distribute, and consume broadband media -- whenever and wherever they may be.

For more information about The Diffusion Group, visit our website at www.tdgresearch.com.

Contact:
Wendy Stockard
469.287.8061
wendy@tdgresearch.com


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