This revolution will be televised

I am renovating my house. Last week, a maintenance man came with his tractor to pave part of my family’s garden. I know in our industry we often use the phrase “cut the cord” as a figure of speech, but the tractor literally cut the cord – the cable cord that ran through my garden.  When I told the story to one of my neighbors, she asked me, “Do you really need to replace the cord? Do you still watch cable TV? Aren’t you already downloading most shows and movies from your PC?”

This incident got me thinking about the TV industry and the tough challenges service providers face from over the top (OTT) competitors, such as Netflix and Hulu. Do you want the good news or bad news first? Research firm SNL Kagan is predicting that roughly 10 percent of American households will go without cable, satellite or telco video service by 2015. This cord cutting is certainly worrisome, but if service providers continue to service the remaining 90 percent, while using the OTT threat as motivation to experiment with new cable, satellite and IPTV business models, the future just may be brighter than expected.

Cut the cord or plug in?

Prepaid TV? Yes, actually.

Platform “n,” the Polish direct-to-home (DTH) pay-TV platform backed by the TVN Group and TP Group, has launched a new prepaid option with good results. There are two packages for prepaid – a basic package offering 27 channels – including several HD channels – and a new package (text is in Polish) with 12 HD channels and a 3D channel.  If you believe this phenomenon is restricted to emerging markets and low ARPU segments – think again. We are seeing more players in mature markets trying to explore the prepaid segment.

 Satellite TV as over the top player? Almost …

 Digital+ in Spain is trying to beat OTT players at their own game by offering  VoD service, in addition to the traditional DTH platform, to all Internet users in an attempt to boost its subscriptions. Digital Plus Videoclub, currently under trial, will allow Internet users to rent films and TV series for a period of 30 days (with a limit of 48 hours from the moment viewing starts).  Consumers can select  à la carte bundles, rather than receiving the traditional bundle of channels (which often contain channels that specific consumers aren’t interested in).

 Content, user interfaces and Web access

 The Google – Dish Network partnership introduced a new type of set-top box (STB) that can access Dish content while using a Google interface to the Internet. This is an attempt to get the best of both worlds – content from Dish, with Google’s fantastic user interface and access to Web content.

 So will I cut the cord? Absolutely not. I am still a fan of the channels being “pushed” to me. However, as I increasingly go to other sources for content to augment my service provider’s offerings, the relationship with my provider will have to change.  In a highly competitive environment with new types of players with different business models – the traditional players are forced to question some of the fundamentals of their business to stay competitive. I suspect the TV business model revolution is only in its infancy. Stay tuned…

 Note: my next blog entry will be posted in September. For those of you going on vacation in August, enjoy!

 *Special thanks to Eric Danis for his editorial assistance.

4 Comments

  1. Shai Shamir
    Posted August 9, 2011 at 10:37 am | Permalink

    Another aspect of cutting the cord is how easy the SP is making this process. I’ve cut the cord, I consume my media from the web. It took me several months to end my contract with the cable company. This bad experience made sure I’ll never plug it again, if I’ll decide to reconnect it will probably be to Satellite service.

  2. Yair
    Posted August 9, 2011 at 7:03 pm | Permalink

    Is the technology there already? I mean that the quality of the video broadcasting, at least based on my experience, is far from the HD quality that you get from all these cable, sattelite etc. SP’s, regardless how nasty is to do business with them…

  3. Paul dvds
    Posted October 6, 2011 at 11:31 am | Permalink

    Dana – Other than Poland, are there other examples of operators moving to Prepaid TV in Europe or NA? pdvds

  4. Hollie Halpin
    Posted October 11, 2011 at 3:43 am | Permalink

    Hi Paul,
    Starmax in Spain is offering prepaid TV. Also, Mediaset in Italy is a DTT provider offering prepaid sports and movies. The US hasn’t quite gone down the prepaid road yet, but Bell Canada and more recently Comcast are trying out a la carte pricing options. – Hollie

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