While much of the attention at 2012 International CES was on connected television and related over-the-top broadband services, existing Pay TV operators are looking at TV Everywhere in order to give subscribers the control and flexibility they’re demanding. Researchers at The Diffusion Group took a look to forecast what will happen.
According to TDG’s latest analysis, by 2016 more than 30 million households will use operator-provided TV Everywhere services to access programs on their connected devices.
TVE allows residential Pay TV subscribers to access the channels they’re paying for even when they’re not sitting in front of a designated television. Services like Netflix and Hulu Plus already let subscribers view content on many different screens, and many PayTV operators are adding those same capabilities rather than lose customers.
“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,” said Colin Dixon, TDG senior partner. “That’s the reality that Pay TV operators are facing.”
TDG expects that at least a few major content providers will sell directly to the consumer, bypassing existing Pay TV operators. From the other side, some operators will attempt to extend existing agreements to cover connected devices without the explicit permission of the content providers. Signs of these both occurring are already visible in the U.S., like the legal standoffs between Time Warner Cable and Viacom.
Dixon believes a middle ground could be the way forward. By that he means content providers can frame the end-user experience while operators provide a branded, authenticated gateway through which consumers access the content, not unlike what UltraViolet is trying to do with DVDs.
“The logic is straightforward,” Dixon said. “If consumers can access their Pay TV 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.'”