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Will TV Everywhere Reverse the Trend for Pay-TV?

U.S. broadband subscriptions are forecast to reach the same level as pay-TV subscriptions in 2016. Meanwhile, American cable and satellite TV service providers will soon reach a critical point in their evolution -- where future success will hinge on the adoption of their TV Everywhere services.

"Based on our continuing analysis of TV Everywhere and over-the-top (OTT) services like Netflix, it’s clear that the U.S. pay-TV industry has reached a historic juncture," said Tom Adams, director and principal analyst at IHS iSuppli.

Neither print nor audio media have been able to properly capitalize on -- or even just withstand -- the savvy Internet start-up service providers, according to the latest market assessment by IHS.

The key question for U.S. pay-TV operators is will TV Everywhere help them to retain customers for video entertainment. Or, will most of their customers eventually leave to adopt the lower-cost offerings of OTT competitors?

TV Everywhere is a service that allows subscribers to access pay-TV content delivered via the public Internet to multiple platforms -- including connected televisions, PCs, smartphones and media tablets.

The challenge for traditional cable and satellite operators is the mounting penetration of broadband among U.S. consumers, which is rising to rival the level of pay-TV adoption.


U.S. broadband connections will expand to 99.9 million in 2016. This compares to 100.4 million for all cable, satellite and telco pay-TV subscribers during the same year.

The growing ubiquity of broadband connections has already leveled the playing field between independent OTT video service providers and legacy pay-TV operators.

The forward-looking challenge will be to provide customers with the most attractive video entertainment package of content, applications and devices for their in-home and on-the-go enjoyment.

IHS has studied the pay-TV operator's various versions of TV Everywhere services, from video-on-demand to linear channels, from download-and-go to cloud-based streaming, and from in-home to out-of-home.

On the network side, they have assessed which content owners are leading the way, and which are lagging, in supporting these TV Everywhere efforts. On the technology front, they've examined which consumer propositions are most likely to be popular and thereby drive sales.

"The battle between pay-TV and OTT will be the key media competition of the decade ahead, just as the battle between the open Internet and proprietary services like AOL defined the mid-1990s," Adams concluded.

The OTT service providers already have significant momentum. Do the legacy pay-TV operators have the right approach -- with TV Everywhere -- to reverse the current trend in the U.S. marketplace? We'll have to wait and see.

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