There are two reasons people like online video. There’s a lot of it, and it’s mostly free. Since no good product can survive on free, the question becomes: how does over-the-top (OTT) video evolve? New research out of IMS (via FierceIPTV) points in a likely direction. According to the firm, OTT content will become an extension of both pay-TV and stand-alone subscription packages. It will still take some time, but IMS predicts that OTT video will become ubiquitous on the TV in the second part of this decade.
Businesses love subscription models because they promise predictable revenue and tend to encourage higher spending. Cable knows this, but so do Netflix, Roku, and Hulu, all of which already use subscriptions or are figuring out how to introduce the concept. The big next step is to create a rich hybrid subscription service that bundles the best of traditional TV with the best of Internet video. On that front, existing cable and telco operators have a head start over standalone subscription content providers. From IMS:
“Pay-TV operators garnered 57% of global TV households at the end of 2009. They are changing their strategies to stay abrest of changing viewing habits. We have already seen numerous operators who are future-proofing their set-top boxes (STBs) with internet connectivity to enable future streaming services.”
The really good news is that convergence will undoubtedly move in both directions, and the competition will not only be interesting to watch, but should lead to rapid evolution over the next five years. By then, will we even talk about OTT video? Or will it just be part of the TV experience?
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