Digital Lifescapes

Ongoing disruption of the video entertainment industry is most apparent in North America, where incumbent pay-TV service providers continue to report significant subscriber declines. Past attempts to slow or reverse the customer losses have proven to be unsuccessful. Clearly, it's a huge challenge. Furthermore, relatively new rivals in the sector, such as AT&T and Verizon, have invested heavily to acquire legacy media and online advertising companies in the hope of finding a viable business model to compete with more innovative offerings from a growing list of alternative providers. Video Entertainment Market Development Meanwhile, the growth of subscription over-the-top (OTT) video services has been driving the changing trends in the pay-TV landscape. OTT video services have attracted hundreds of millions of subscribers worldwide, causing pressure on traditional pay-TV operators. This OTT growth trend is expected to continue, reaching a subscriber base of 400 million i...

Consumer video entertainment is about to evolve, once again. High dynamic range (HDR) features will infiltrate some full high-definition (HD) television sets and thereby help to boost the emerging 4K TV set (UltraHD) market momentum. ABI Research forecasts that HDR TV shipments will grow at a 41 percent CAGR and reach 245 million units in 2022. According to their assessment, 8K TV sets are still years away from reaching the global market, with market hype currently centering on Japan’s plans to deliver 8K video at the 2020 Olympics. HDR TV Market Development "As evident with Sony’s recent announcement to include HDR in all its new TV sets, the next-generation TV technology will soon be a prominent feature in many UltraHD TV sets," said Khin Sandi Lynn, analyst at ABI Research . While some less expensive TV sets will not yet support the new technology, high-end TV manufacturers recognize the value that HDR functionality brings to the customer viewing experience. Vend...

Some traditional pay-TV service providers have already supported their customer's expectations for better apps on smart TVs, which enable service subscribers to overcome the limitations of their provider's set-top box and limited on-demand video programs. Moreover, the leading online video subscription services -- such as Netflix, Amazon Prime and Hulu -- enable millions of American smart TV owners to independently access video entertainment (without traditional pay-TV). Internet-Connected TV Market Development According to new research from The Diffusion Group (TDG), the penetration of Internet-connected TVs among U.S. broadband households has increased nearly 50 percent since 2013 -- from 50 percent market penetration to 74 percent at the end of 2016. Connected-TV market penetration grew by 22 percent between 2013 and 2014, and another 15 percent between 2014 and 2015. However, new growth has slowed to only 4 percent, indicating that the market has matured, which is...

Enterprise-wide implementations of audience engagement software and services for advertising, marketing, sales and services continue to increase by 5 to 6 percent every six months, reaching nearly 20 percent according to the latest market study by Technology Business Research (TBR). Over 50 percent of enterprises are either in proof of concept or scaling up their digital technology deployments. According to the TBR assessment, digital technology is mainstream and it's already changing the way that businesses interact with their online stakeholders. Digital Media Market Development Traditional media continues the move to digital formats, driving a significant shift in spending. Digital native service providers -- such as Google -- are capturing billions in advertising spend as organizations pivot from traditional print and television formats into more effective online engagement. Newspapers everywhere have suffered greatly from the shift to the digital economy. Meanwhile, T...

Video entertainment demand has been evolving rapidly. Yet traditional pay-TV service providers are still challenged to address the needs of more progressive consumers. Case in point: subscriber awareness of their "TV Everywhere" offerings -- the ability to watch programming from their pay-TV provider on devices other than a TV -- remains low at 36 percent, which is unchanged since 2013. Meanwhile, pay-TV marketers are attempting to capitalize on another growing trend. Skinny bundles, TV subscription packages composed of selected channels targeting specific customer segments, have the potential to attract elusive younger consumers to pay-TV, according to the latest market study by Altman Vilandrie & Company. However, their survey also finds that two-thirds of older consumers, typically the most loyal subscribers of legacy pay-TV, say they are wasting money for channels they don’t use -- so, skinny bundles could cannibalize the service provider's existing subscriber...

Streaming video entertainment services, such as those available from Netflix and Amazon, have already had a significant impact on the pay-TV sector in North America. As a result, European pay-TV operators that witnessed this disruption are eager to consider options that would enable them to transform their business. Amazon Video has announced it will be launching its Amazon Streaming Partners Program (ASPP) in Europe. Amazon operates a platform business model for video; it provides flexible video entertainment services to consumers and content rights holders, plus it's already present in every part of the value chain. Amazon is becoming a credible and more direct competitor to pay-TV service providers, despite not competing with core live content, according to the findings from the latest market study by Analysys Mason. Pay-TV Market Development in Europe This platform business model allows video content owners to offer their own subscriptions through Amazon Video, instead ...

Several television broadcasters and pay-TV providers have attempted to match over-the-top (OTT) video by offering their own online services. Most notable is the move by HBO to offer a subscription service to their TV shows via HBO Now. Revenues from subscription video on demand (SVOD) services, such as Netflix and Amazon, are set to more than double from $14.6 billion this year, to $34.6 billion in 2021. Netflix will now grow its U.S. subscriber base to be similar in size with leading traditional pay-TV service providers. Ongoing SVOD Market Development According to the latest market study by Juniper Research, SVOD providers will see substantial returns on their expansion and growth strategies, as more countries and markets move to this method of video consumption. And, as more consumers adopt the move away from the old linear, scheduled TV model. While SVOD continues to draw customers away from traditional pay-TV providers, legacy networks are now seeking to diversify and a...

Online video entertainment has disrupted most legacy media companies that refused to acknowledge the market opportunities beyond traditional pay-TV services. This shift has become a global phenomenon. The impact and implications are far-reaching. Western European over-the-top (OTT) television and video revenues will more than double between 2015 and 2021. However, growth rates within each nation will vary considerably, according to findings from the latest market study by Digital TV Research. "OTT adoption is already high in Scandinavia, the Netherlands and the UK, but it has been much more muted in other countries -- such as France, Spain and Portugal," said Simon Murray, principal analyst at Digital TV Research . European OTT TV Market Development OTT TV and video revenues in Western Europe will reach $14.64 billion in 2021 -- that's up from $6.40 billion in 2015. From the $8.25 billion in revenues to be added between 2015 and 2021, the UK will contribute $2.30 ...

Traditional Pay-TV service providers in saturated markets, such as North America, could use a new value-add competitive edge to counter the ongoing subscriber losses from low-cost OTT video entertainment growth. Television sets with 4K video capabilities also present a growth opportunity for pay-TV equipment vendors. ABI Research forecasts the 4K set-top box market will quadruple in size from less than two million units in 2015 to more than 7 million in 2016, and then grow by 46 percent annually through 2021. However, the overall pay-TV set-top box market is on the decline, expected to drop by about nine percent in 2016 to less than $16 billion in revenue -- with both pay-TV and free-to-air boxes losing value. Pay-TV Market Development Challenges “Digital transitions are taking longer than initially planned and the market is experiencing significant downward pressure on set-top box pricing,” said Sam Rosen, vice president at ABI Research . According to the ABI assessment, har...

Pay-TV service providers across the globe are responding to the emergence of agile video entertainment competitors. The over-the-top (OTT) television and video service revenues for 17 countries within the Asia-Pacific region will reach $18,396 million in 2021 -- that's up from $5,741 million in 2015. Furthermore, China will overtake Japan in 2016 to become market leader in the region. "Smartphone users will continue to drive OTT TV and video audiences. Smartphones are a more important OTT TV reception method than fixed broadband in the Asia-Pacific region -- with the notable exceptions of Australia and New Zealand," said Simon Murray, principal analyst at Digital TV Research . Advertising on OTT sites will remain the main revenue source, bringing in $8,745 million by 2021 -- that's up by $6 billion from $2,609 million on 2015. China will supply $4,911 million of the 2021 total, with Japan providing a further $1,475 million. OTT Video Market Development in APAC ...

Worldwide pay-TV revenues -- including subscription fees, PPV movies and TV episodes -- for 138 countries will grow by $99 million between 2015 and 2021 to reach $205.92 billion. That follows a 19.5 percent growth rate between 2010 and 2015, according to the latest market study by Digital TV Research. North American pay-TV revenues will fall by $13.5 billion between 2015 and 2021. Customer decline is responsible for some of this loss, but greater competition and conversion to bundles are more pressing factors. Moreover, the Western Europe region growth will be flat at $31 billion. "Most of the rest of the world will not follow the North American experience. True, pay-TV revenues will fall in 27 countries between 2015 and 2021, but not to the same extent as in Canada and the U.S. market," said Simon Murray, principal analyst at Digital TV Research . Major Shift in Pay-TV Market Development That being said, most countries are nowhere near the market maturity achieved...

It's interesting to look back over the last few years of ups and downs within the American video entertainment and associated broadband internet access markets. The ongoing market transitions have created a volatile environment, where service providers react to the constantly shifting customer demand. Leichtman Research Group (LRG) reported that the thirteen largest pay-TV providers in the U.S. -- representing 95 percent of the market -- lost about 380,000 net video subscribers in 2015, that's compared to a loss of about 150,000 subscribers in 2014, and a loss of about 100,000 subscribers in 2013. The leading American pay-TV providers now account for 94.2 million subscribers -- the top nine cable companies have over 49 million video subscribers, satellite TV companies 33.7 million subscribers, and the top telephone companies 11.5 million subscribers. Shrinking Demand for Pay-TV Service Truly, 2015 was another year of transition for American pay-TV service providers. Th...

The video entertainment industry has experienced many changes during the last decade, but few were as dramatic as the shift in global pay-TV growth prospects. While many developed nations reached market saturation, emerging markets in the Asia-Pacific region assumed the market development leadership position. Pay-TV subscriptions for 338 operators across 89 countries will increase by 200 million from a collective 704 million in 2014 to 904 million by 2020, according to the latest worldwide market study by Digital TV Research . That being said, China Radio & TV is the world's largest pay-TV operator, by a wide margin. Chinese government policy to consolidate cable TV means that China Radio & TV quickly became the world's largest pay-TV operator -- with 198 million subscribers by the end of 2014. They will soon represent every cable TV home in China, with a forecast 252 million subscribers expected by 2020 -- that's an upside increase of nearly 54 million compar...

The impact of alternative forms of video entertainment on the traditional pay-TV sector is now very much a global phenomena. What started as a small disruption in North America, with the introduction of Netflix and Hulu service offerings, has evolved into a transformation that reaches far and wide. Over-the-Top (OTT) television and video revenues within the Eastern Europe, Middle East and Africa (EEMEA) region, which includes nineteen countries, will reach $2.63 billion in 2020 -- that's up from only $52 million recorded in 2010, and the $616 million expected in 2015. According to the latest market study by Digital TV Research, from the $2.21 billion in revenues to be added between 2014 and 2020, Russia is forecast to contribute $795 million, with Turkey bringing in a further $219 million. Russia will remain the largest revenue earner in the region, by a wide margin. "OTT in Eastern Europe, Middle East & Africa will still be an immature sector by 2020, although thi...

Digital video entertainment continues to gain momentum around the globe, as more consumers embrace high-definition broadcast television services -- many will also choose to connect their TV sets to the internet and subscribe to over-the-top video streaming offerings. Based on forecasts for 138 countries, the number of digital TV homes will increase by more than 1 billion between 2010 and 2020 to reach 1.65 billion -- that's up by 180 percent, according to the latest worldwide market study by Digital TV Research . The total digital television households will climb by 134 million during 2015. According to their assessment, global digital TV penetration will reach 97.6 percent of television households by the end of 2020 -- that's up from 40.5 percent at the end of 2010 and 67.2 percent at the end of 2014. By 2020, 93 countries will be completely digital, compared with only 17 at end-2014. It's now forecast that about 124 countries will have more than 90 percent digital...

Traditional forms of video entertainment are already saturated in most of the developed nations around the globe. Meanwhile, some of the more promising emerging markets are growing at a more gradual rate than was anticipated, due to current economic pressures. According to the latest market study by ABI Research, the worldwide pay-TV market grew by just 4 percent in 2014 to reach 923.5 million subscribers. "Despite the growth in subscriber base, weak currency exchange rates resulted in a slower increase of pay-TV market service revenue. Worldwide, the pay-TV market generated $257 billion in 2014 and is expected to surpass 1.1 billion subscribers in 2020 with a CAGR 2.7 percent," said Jake Saunders, VP and practice director at ABI Research . Cable and terrestrial TV markets had weaker growth rates in 2014 compared to satellite and IPTV platforms. However, high definition (HD) penetration is increasing across all pay-TV platforms because of the increasing number of HD cha...

While digital media players enable the use of over-the-top streaming video content and other platforms that enhance viewer control, new research suggests that they may also provide a net gain for traditional television program viewing. According to the findings from the latest market study by GfK, 19 percent of TV viewers now own at least one of the three major digital media players -- Roku Stick, Google Chromecast, or Apple TV. This represents a 10-fold increase over the 2010 ownership level of approximately 2 percent. Overall, 43 percent to 50 percent (the levels vary by device brand) of digital media player owners say that they use the devices in addition to their regular TV viewing – larger than the proportions (31 percent to 42 percent) that use them as a substitute for traditional TV. Chromecast owners are most likely to report that their digital player usage supplements, rather than replaces, traditional broadcast television viewing. But roughly one third (38 percent to ...

Netflix has global mind-share, even though it's officially available in only a handful of countries. The consumer awareness of the subscriber benefits are a testament to the apparent pent-up demand for affordable over-the-top (OTT) streaming video entertainment services. Growing interest in the Netflix video entertainment offering also demonstrates how the legacy pay-TV business model is equally vulnerable to disruption in other nations -- as it has already proven to be in the U.S. market. Netflix is expected to achieve 17 million paying subscribers to its international operations by the end of 2014, following its official announcement of 14.4 million international subscribers in September. Launches in six European countries during September will help to boost the total, according to the findings from the latest worldwide market study by Digital TV Research. "We have made several adjustments to our previous estimates, based on the June results -- subscriber numbers are...

What happened to the legacy video entertainment market in America, and why has HBO announced that they will -- for the first time -- choose to bypass the traditional pay-TV distribution channel to reach new customers? While residential broadband internet access will soon reach 100 million households in the U.S. market, legacy pay-TV subscription services have already peaked and are in a slow decline. According to the latest market study by The Diffusion Group (TDG), during the next few months, and for the first time in history, the number of home broadband subscriptions will surpass the number of home pay-TV subscriptions. In September 2014, TDG surveyed 500 adult broadband users that did not subscribe to a traditional home pay-TV service -- such as those offered by cable, satellite or telco network operators. Based upon the TDG market assessment, they uncovered that 14 percent of adult broadband users do not use a legacy pay-TV service -- that's up from 9 percent in 2011, ...

The low-cost set-top boxes used with over-the-top video entertainment services, such as Netflix and Hulu, were instrumental in early market development -- prior to the availability of internet-enabled Smart TV sets. Market demand is still strong. Streaming media players were added to 6 million American homes over the past year, increasing ownership penetration to 17 percent of U.S. Internet households in the second quarter (Q2) of 2014, according to the latest market study by The NPD Group. Moreover, streaming media player ownership is expected to increase to 39 percent of U.S. Internet households by the beginning of 2017. The current, and future, penetration increases are being driven by three main factors; more brands in the market, more software apps, and lower device prices. "In its infancy, the streaming media player market had two major players driving growth; Apple and Roku – now we have four relevant hardware manufacturers with the addition of Amazon Fire TV and Go...