Technology | Media | Telecommunications

Wednesday, August 25, 2010

TV Everywhere: Will it be Too Little, Too Late?

The growth of online video adoption and consumption is happening faster than most media industry analysts had expected. By 2014, it's forecast that there will be 57 million U.S. broadband households viewing full-length online video on the TV, according to the latest market study by In-Stat.

Revenue associated with this web-to-TV video content will grow at an accelerated rate, from $2 billion to over $17 billion during a five-year period.

"The over-the-top (OTT) video market represents a new distribution channel for digital entertainment. Content producers want to market premium video content directly to the consumer," says Keith Nissen, Principal Analyst, In-Stat.

That said, they have not yet decided the best way to monetize OTT video content and how to manage the "good enough" OTT video service opportunity in context with their legacy distribution partners -- the slow moving traditional pay-TV channel.

As incumbent pay-TV providers overcome their concerns regarding the cannibalization of existing service revenue, then perhaps they will eventually act to deliver competitive OTT streaming IP video services.

The question remains, however, will the promise of "TV Everywhere" offerings fully emerge to coincide with the current market opportunity, or arrive very slowly as a belated damage-control effort?

In-Stat's market study highlights include:

- The installed base of web-enabled consumer electronics video devices will grow from 70 million in 2009 to 237 million in 2014.

- The total number of U.S. broadband households that own web-enabled CE video devices will nearly triple to 98 million by 2014.

- Within five years, over 11 million operator-provisioned hybrid STBs will be delivering online video content directly to the TV.