No, I'm not talking about THE earthquake, although this shift can be considered "tectonic" in a non-literal sense. I am of course talking about the impeding changes in video delivery landscape or OTT services in their general sense.
I spoke at this week's Streaming Media East in NYC, a conference that focuses on digital multimedia distribution and was dominated by one burning question: (when) will video services migrate to Internet-based ones, open competition, and a la carte models that customers seem to demand? With so many attendees, speakers, and exhibitors that were all qualified to provide opinion, there were almost no answers like "never", "now" or "next year". To my surprise, the consensus formed around the humble "I don't know".
It is good to hear that, even if such honesty is forced by fear of being perceived as incompetent when the near future debunks seemingly confident statements. To avoid such a terrible fate, one might resort to analysis of today and ponder on "what makes sense" in the end. For the systems that will survive are the ones that tend to make sense in the long run.
For example:
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Number of TVs sold, DVD sales (SNL Kagan is reporting a 44% decrease in DVD revenues), PayTV subscriptions are all in decline (mostly in US, for now). This is not a temporary glitch caused by, say, DTV transition or the current economic crisis. Alternatives to established business models are here, profligate times are over, and prices need to match services at new levels.
The future that makes sense has broadband and media services as two separate entities, each competing in its own domain by offering superior service or lower prices.
Does this mean that the service bundling model (triple or quadruple plays) is becoming obsolete? Quite the contrary - MSOs are best positioned to establish dominance in the changing landscape but they should not count on having captive customers. Indeed, they must compete.
Finally, I have to admit that my answer to "when" is also "I don't know" (at this point in time that is). But in a key difference between markets and earthquakes, the tools for monitoring developments do exist. So too do qualified independent experts who know how to use them. The time is right for positioning for the game of the early 21st century.
Be prepared and do not wait for the last minute to release the "grip on power", it might already be too late. Above all, stay tuned ... more to come.
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