Why Pay-TV Set-Top Box Use Will Decline Rapidly
The percentage of global households using set-top boxes (STBs) to access pay-TV channels is projected to drop more than 31 percent by 2015 from 82 percent household penetration in 2011, according to new data from IHS Screen Digest.
Instead, nearly 50 percent of households will access TV content through PCs, smartphones, tablets and other multi-screen devices.
IHS reported that by 2016, set-top boxes will relinquish their customary position as the near-exclusive video consumption device among the 43 major cable, satellite and Internet protocol television (IPTV) providers that are proceeding with multi-screen deployments.
via Home Media
Digital Cinema Distribution Coalition Launches Sat Venture
Cinemacon 2012 saw the resurgence of Digital Cinema Distribution Coalition, a joint venture satellite distribution operation between Warner Bros, Universal Pictures and Digital Cinema Implementation Partners itself a JV between three lead exhibitors AMC, Regal and Cinemark although other studios and Lions Gate are also in talks to join up.
The goal is to drive down the cost of delivering digital content — for both content providers and exhibitors.
This launch could be a game-changer for digital distribution in North America (and maybe wider) in the medium term but in the short term it is a coup for Deluxe/Echostar satellite joint venture.
via ScreenDigest
More Pay-TV Subscribers Plan to Cancel or Downsize
More than 13% of pay-TV subscribers will cancel or downsize their monthly bills in favor of lower-cost video entertainment sources during the next three months.
Centris Research, in a survey of 7,000 Internet interviews, found that 21% of pay-TV subscribers planned to change their pay-TV service, with 10% downsizing their monthly bill, 8% switching providers and 3% canceling service completely.
The survey underscores a growing trend among pay-TV households that finds cable continuing to lose customers.
Large U.S. Pay-TV Service Providers Survive Recession
The sharp contrast in performance between the largest operators and the rest of the industry confirms that size matters in TV delivery. With a few exceptions, the larger the operator, the easier it seems to be to navigate the new entertainment landscape. In fact, the economics of the industry appear to have reached a level of maturity where only the top operators are able to compete successfully.
Take Comcast, for example; not only did the company nearly halve its subscriber losses from a year ago, but it also accounted for almost half of all of cable’s new broadband and telephony connections, thanks in large part to the Broadband Essentials package the company launched during the quarter which provides low-cost internet to low income households in urban areas.
A similar dynamic seems to be playing out in satellite TV where DirecTV has consistently outperformed DISH since the onset of the recession.
via ScreenDigest
Pay-TV Subscriber Disconnects Now at an Alarming Rate
Cord Cutting (service disconnects) is an issue that Pay-TV providers just can’t seem to spirit away. For the twelfth consecutive quarter, U.S. Cable TV providers posted net subscriber losses in the second quarter 2011.
This time, however, Satellite operators were not spared. Collectively, U.S. Pay-TV providers lost 400,000 subscribers in the second quarter— their single worst period in years. Cable TV took the brunt of the hit, though Satellite operators were not left unscathed.
Though much of the subscriber loss can be attributed to traditional economic churners — “deal seekers” looking for a lower price — the percentage of those who say they’re giving up on Pay-TV altogether is not abating.
4.5M Households to Drop Pay-TV for OTT Video
About 4 percent of U.S. households, or 4.5 million homes, will have said goodbye to cable, satellite or telco TV in favor of Internet video options by the end of 2011, says a new report from SNL Kagan.
“Though the thin slice of households relying [on over-the-top] substitution could be dismissed as evidence of a lack of momentum behind cord cutting, the 4.5 million households it represents are not inconsequential, particularly in light of the basic subscriber declines for the cable industry,” the firm wrote in a report.
The firm predicts that multichannel substitution via over-the-top (OTT) video delivery will expand from 2.5 million households at the end of 2010 to 12.1 million by 2015 –representing 10 percent of all households.
via FierceCable
How Netflix Users are Downgrading their Pay-TV Subscriptions
The proclivity of “Netflix streamers” — those customers who stream their content to network-connected devices — to downgrade their pay-TV service has doubled in the past 12 months, according to a new report from The Diffusion Group (TDG).
The report adds that the so-called “Netflix effect” — which sees growing use of the online video service — leading to pay-TV service downgrades or event cancellation gaining momentum.
The percentage of Netflix streamers who are likely to downgrade their pay-TV service was found to have increased from 16% in March 2010 to 32% in March 2011, according to TDG — which polled the opinions of adult broadband users that subscribe to cable, satellite or telco IPTV pay-TV services.
via IPTV news
U.S. Digital TV Service Provider Performance
Comcast continues to hold onto the number one position in U.S. Digital TV market, finishing up 2010 with 19 million subscribers. DirecTV — which saw 4 percent growth over the year — is closing the gap though, posting 19.2 million digital subs at the end of Q4’10.
Verizon broke into the ranks of the top five largest digital TV providers in the U.S. in the fourth quarter of 2010, adding 182,000 new subscribers in Q4, and 721,000 for the year.
At the end of 2010, Verizon claimed 3.4 million customers on its FiOS TV platform. DirecTV, Comcast and AT&T led the pack in net new additions for the quarter, each bringing in roughly 250,000 in the quarter.
Despite slowdowns in U.S. Telco TV rollouts, Strategy Analytics still projects strong subscriber growth for 2011 as both AT&T and Verizon concentrate on increasing penetration in their existing IPTV footprints.
Get Used to Lower Margins, Hulu tells Pay-TV
Cable, satellite and IPTV providers will have to develop a tolerance for low profit margins on video content in a world of increased over-the-top and multi-screen distribution, Johannes Larcher, Senior VP International at Hulu, told delegates at IP&TV World Forum.
Larcher also predicted disruption in the advertising market, but pointed towards a beneficial outcome. In this new world of distribution over the Internet, brand advertisers stand to gain from more targeted and meaningful communications with their customers.
Brands are far less likely to put up with the waste they have had to accept in linear TV. So that is disruptive to existing brand advertising services — but it is another opportunity to create value.
via Videonet – News and Analysis – Get used to lower margins, Hulu tells Pay TV.
HBO as the Next BLOCKBUSTER [#Fail]
Because HBO has no direct-to-consumer model, it is 100% reliant on its pay-TV distributors for its subscription success. That means that as these relationships ebb and flow, the company does not have full control of its business.
Last year, for example, HBO was in a spat with DirecTV, which essentially ceased having its customer service reps promoting HBO. This was an important, though only partial contributor to HBO’s loss of almost 2 million subscribers in 2010. This is a trend that’s not going away either; where HBO and other premium channels were once pay-TV’s top promotional levers, they’ve long been replaced by other higher-margin services like high-speed Internet, digital, HD, VOD, voice, DVR, etc.
In short, pay-TV operators now have many arrows in their quiver. While HBO and other premium networks are still valuable profit drivers, they don’t have the pay-TV operators’ mindshare like they used to.
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