It looks like traditional cable television is streaming the wrong way; the days of paying large monthly bills for bundled channels that remain half unwatched are over. The MSOs that choose to evolve and stream their consumer’s way will remain relevant players in the media and entertainment industry. Those that don’t will turn into mere bitpipes. Good luck…
The adaptive, attentive and innovative MSOs are adopting, and already delivering, various streaming services that will keep them in the content delivery game, and more importantly keep their customers. These services include TV Everywhere (TVE), Cloud DVR (cDVR) and Direct to Consumer (D2C).
TV everywhere – literally
TVE lets you take your regular TV broadcasts and view them everywhere. TVE streaming services are free (or actually included in the price of your TV subscription), so they need to be authenticated with your TV provider. Today all major cable and satellite services in the US offer some form of TVE service, with the premium examples of Comcast’s Xfinity TV Go, DISH Anywhere, DIRECTV Everywhere, and Time Warner Cable TV Everywhere. If in any case you’re paying for a TV subscription, you can get TVE services at no additional cost, so why not?
A recent GFK report shows an increase in TVE for mobile and home TVs. Nevertheless, there’s still a lot to do for promoting awareness, as only 25% of consumers (ages 13 to 64) have even heard the expression TVE, indicating no change whatsoever since 2012. The fact that accessing TVE demands authentication is still annoying to many users and can discourage new potential subscribers (check out GFK’s summarizing infographic).
The promise of TVE to reduce churn, strengthen subscriber loyalty and attract the young generation of viewers is yet to be proven. At this point I can say that TVE may not be the one and only hope for the decrease in pay TV subscriptions, but it can serve as a one-of-many valid and appealing solutions to offer subscribers.
Cloud DVR – beneficial for everyone
cDVR enables recording and watching TV content on any device and from any location, at home or on the go, even with your set-top box (STB) turned off.
One of the smarter moves MSOs can make today is evolve from providing services through hardware-based devices – that need to be deployed to the home, and maintained there at high cost – to delivering content, elegantly and smoothly from the cloud.
Consumers want the flexibility to record and watch TV anytime, anywhere and on any device. In an all-IP world this is becoming a default expectation. Netflix, Amazon, HBO Go are just some examples of how to enable subscribers to time shift and place shift content across screens. In a customer-centric and content-focused market, the pay TV services need to include these options; again by default.
Good for MSOs – cDVR provides benefits in storage, scalability, flexibility and eliminates the hassle (and cost) of dealing with STBs.
Good for subscribers – I think there’s no need to elaborate on the benefits of having the content you like available whenever, however and wherever you want.
D2C – loving it
TV networks and brands such as Fox, HBO and Disney have traditionally been delivered to consumers through cable and satellite providers, as part of channel bundles. Some networks are broadcasting over the air, but others don’t have their own delivery infrastructure, so they have to rely on the cable and satellite providers as aggregators of content.
The Internet has changed all that. Today, any TV network or channel can broadcast directly to its subscribers over the Internet, and immediately enjoy the widest distribution possible. Lately we have seen many new entrants to this field, such as HBO Now, Discovery DPlay, and DisneyLife show. According to IHS, broadcasters are offering more and more D2C services and will be able to benefit from online subscription revenues as subscribers will enjoy a personalized TV experience.
The television’s golden age is still quite expensive, but subscribers will pay for a D2C service as long as it’s worthwhile for them. This would mean figuring out the content subscribers want and getting it delivered to them directly, on any screen and wherever they are. The ability to allow subscribers to be “the boss” of the programming but without too much effort on their part, is key.
A summary of the quickening pace of D2C launches by OTTs can be found on Adobe’s blog. MSOs should keep up with the pace… And indeed they are. Last February, Dish Networks launched an OTT service called Sling TV, which offers a basic package of 19 live channels for $20 a month, and additional packages for sports, kids, lifestyle, news and more for an additional $5 a month each. This service is offered to any consumer, not only to DISH subscribers.
Last October, Comcast launched its own “skinny bundle” of 70 live channels called Stream TV, which is available exclusively to Comcast’s Internet customers. In contrast to Sling TV, this service is not OTT, since it is carried over Comcast’s internal cable network, and not on the open Internet. Customers view the service on their own digital devices – PCs, tablets and phones – instead of through an STB connected to a TV. And best of all, the service does not count towards the customer’s Internet usage.
MSOs must let subscribers define their own media experience
The traditional pay TV industry has been declining over the past years and hence, all agree that MSOs need to evolve to meet consumer expectations. Or else it will be the bitpipe flipside…
With the rise of TVE, cDVR, D2C and future services, streaming will become the default and conventional way to view content, by anyone and anywhere. The future is all-IP, and the future is already here. TV that is not IP-based will simply not be part of the future.