The new “Total Audience Report” by ratings experts Nielsen touches on the hot topics for the TV industry of the future. What is happening to traditional linear TV and what is happening with Pay-TV, who are both facing OTT video streaming competition?
Online video streaming was up 60% in 2013 (7 hours/month to 11 hours/month) while traditional viewing went down 4% (from 147 hours/month to 141 hours/month). There is still a huge discrepancy but the trend is there.
On the cord-cutting front, there are now 2.8 million broadband households without a Pay-TV package, up from 1.1 million households in October 2013. This development can probably be attributed to the rise of Netflix, Hulu and Amazon Instant Video, among other OTT streaming services, with SVOD subscriptions rising by 19%.
TV may not be dead, but change is in the air.
Read more on TV versus online viewing here.
Read more on Pay-TV versus OTT here.
The announcement by HBO and CBS to offer their services to OTT customers, unbundled from cable pay-TV packages, caused quite a stir in the industry. It comes on the heels of Netflix’s successful worldwide expansion strategy.
This Techcrunch article adds some opinions on what OTT means for the industry:
– As Will Richmond of VideoNuze recently articulated, the simplicity and cost-effectiveness of traditional cable bundles could very well become more attractive to consumers in the face of proliferating streaming services whose fees will start to add up.”
– “Rather than a binary future with cord-cutters on one end and cable subscribers on the other, we can start to see a continuum of behavior take shape, with a middle ground populated by individuals who subscribe to one or two streaming services, along with a lightweight cable package like the one that Comcast rolled out last year.”
– “One potential scenario is for Netflix to seek out partnerships with cable providers. Their content is already distributed via traditional cable packages overseas and to subscribers in some very small markets in the US, so now may be the time for them to start forging deals with the bigger players in order to straddle both worlds.”
Read the whole article here.
The FCC has had to review two major mergers in the content industry: Comcast and Time Warner, AT&T and DirectTV. As a part of these reviews, the FCC requested the Pay-TV deals that these companies are involved in to be made available for third parties. “The documents in question, which would be released Thursday unless the court acts, contain details of the agreements between channels and pay-TV providers, including business terms such as the price for carrying channels and guidelines for making content available online.”
TV channel owners Walt Disney Co., CBS Corp, Viacom Inc., 21st Century Fox, Time Warner Inc., Scripps Networks Interactive and Univision Communications Inc. requested that releasing the details of these deals would cause substantial harm to their businesses in the competitive TV programming market.
Go to WSJ for more.
The emergence of OTT video streaming and a new generation of consumers, the millennials, have put the TV industry’s focus on cord cutters and cord nevers, two distinctly different subsets of the viewing population.
“Cord cutters, of course, are consumers who used to buy pay-TV services, but who opted for Internet-based video streaming at some point in the near past. Cord nevers, on the other hand, have never seen pay TV as an option.” The cord nevers, naturally, are to be expected at the younger end of the 18-34 demographic: Consumers that have grown up as digital natives, relying on mobile devices and Youtube for their viewing pleasure. Cord cutters tend to be a little older.
Among analysts the discussion on why exactly the younger demographic doesn’t buy cable Pay-TV bundles is still ongoing.
Read more here.
If you have the time, read this entertaining article from “Vulture.com”, which takes a look back in television’s history to help understand the changes the industry is going through, especially with the announcements of CBS and HBO declaring that they would soon offer a direct to customer on demand streaming service.
This is a step towards unbundling the pricey cable TV packages that american customers have been complaining about, moving towards an à la carte model, which could save viewers plenty, as the article lays out: “For under $25 a month, a combo of the Eye’s new service and Hulu Plus, along with Netflix, will get you access to most next-day episodes of network and many cable shows, plus a host of past seasons (and some buzzy originals) via Netflix. Adding Amazon for $99 a year (or $8.25 per month) keeps your TV bill under $35 and gives you access to past seasons of almost every big TV show (plus some original content and free shipping). And assuming the new stand-alone HBO Go is priced, as expected, at about $15 per month, you should be able to cut the cable cord and not miss much beyond sports and news for just under $50 — well below half the $123 average cable bill at least one analyst is forecasting for next year and the $65 or so most people now pay for just expanded basic cable (sans HBO).”
However, unbundling could lead to confusion among customers, who would have to subscribe to many different content sources and as many different apps, which could easily lead to a bill as high as the current cable bill. “Unbundling does not appear to be the answer. The consumer does not want to choose from relatively highly priced, small content packages. Rather, people want the ability to choose from more content and not have to make choices about what to pay for and what they don’t want. That decision will be confusing, paralyzing, and ultimately lead to more dissatisfaction.”
Take the time to read this article!