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Question of the Week: What would you list as the top trends in the OTT space?

Q: What would you list as the top trends in the OTT space?

A: This is a question asked of us often.  Here's a quick response of what we are watching. 

  • Modernizing TV – the 80 year old franchise is ripe for a makeover and the content creators are beginning to see just what OTT can deliver. Whether it be simulscreening to an iPad or simply combining OTT with broadcast content in a hybrid platform like TiVo or GoogleTV, the experience of TV itself is changing. The Oscars may never be the same again.

  • Cord Shaving – While the industry has been focused on the “mythical” cord cutters, consumers have quietly been shaving their PayTV subscriptions. 1.6M subscribers dropped HBO and Cinemax last year. In the same period Netflix picked up 8M subs. If you can live without Entourage, Netflix at $9 sure beats an $18 HBO subscription.

  • The Netflix Pinnacle - This has been the golden year of Netflix. While they’ve enjoyed low content costs for streaming, virtually no competition, not to mention being a darling of Wall Street, these advantages begin to change. Netflix is now the target – but their head start is huge. While the end is not in sight, the zenith / pinnacle may be.

  • Failure of Blockbuster – While the company recently won court approval to auction itself and avoid Chapter 7 liquidation, Blockbuster continues to slip into oblivion leaving a huge gap in the home rental market. This opens the door for an even greater expansion of OTT services, though we expect about 90% of that to be rental revenue. See last week’s question on rental price disparity.

  • Studios embracing new relationships with OTT – Studios want direct relationships to the consumer. Oddly, Netflix may help this effort. While many people are buying Blu-ray players to use as Netflix STBs, the penetration of these devices is allowing the studios to release new disks that combine both streamed and local content. While these are just starting to come to market, could a Movie Club of streamed content be far behind? More interestingly, when studios realize that they are competing against themselves, what will happen to Hulu?

This week's Question comes from Gloria Lee at Fox Networks.  Gloria will be receiving a Roku box for her submission.  Got a question?  Ask us!



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Only published comments... Mar 18 2011, 05:24 AM by The Diffusion Group
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Comments

 

Dave Hageman said:

In your recent Issue 25 of the OTT Monitor, there is a one sided commentary on charging for bandwidth usage.  I have been in the Telecom industry for over 26 years.  I agree, consumers will continue to want more.  This industry is completely focused on large carriers.  I find it interesting that AT&T Wireless claims to cover 97% of people.  Yes, but only in 3% of the geographic area.  Ok, maybe they cover more.  But much of this nation owes its ability to do what they want, buy what they want on what is produced in that other 97% of the land area.  In Telecom, this 97% of land area is not covered by any sizable carrier.  WHY?  Because there is not money to be made there.  This is why Universal Service was constructed.  So those that produce what the 97% of people consume can have the same as those 97%.  As you probably can see by now, yes I work for a Tier IV carrier.  Now onto my real point.  I costs us to provide any service to our customers in this area.  When customer density is measured close to 1 per square mile, what would be the real cost to provide any service to them?  There is that arguement that if they cant pay, then they dont need it.  Dont forget, if many of these people dont live out here and produce oil, natural gas, cotton, food products, where would the 97% get them and how much would they cost?  Sorry, I digress.  If we charge $XYZ for a 1 Meg service and based on general usage for surfing, what will it cost us to provide a 1 Meg service to that same person if they decide to constantly use a full 1 Meg all the time?  Oh well, they are paying for it.  Are they?  If we had 1000 customers all signed up for 1 Meg, this means we would have to have a constant 1GB service up all the time.  What kind of bandwidth would anyone have to have to serve all their customers? For us, it is not about charging more to keep the customer on our video services.  It is about survival,  Just like the OTT companies out there.  It appears to my little mind there are a LOT of companies that depend on our service to deliver their product and they want us to do whatever it takes to do what we have to for them and nothing for us.  Sounds like the tail wagging the dog to me.  This is on a small scale, wonder if it works the same on a larger one.  Oh, of course.  There are no increased costs to provide more and more and more and more bandwidth, we just want to keep the costs the same and push out the OTT providers since they compete against us.  By the way, we  DON'T provide any video services, we just want to survive like most other companies.  That is if you care about the 97% of the land area customers.

March 18, 2011 4:16 PM
 

PJL said:

There are no new episodes of ENTOURAGE on HBO and the reruns are now in syndication.

March 19, 2011 12:22 AM