Five TelcoTV Takeaways
Who's afraid of OTT? Almost no one. Many TelcoTV providers are looking at over-the-top (OTT) video for the opportunities it can provide, not the threat it poses to pay-TV services. That may be because so many early IPTV providers have found their video products to be profit-challenged and are now looking for video alternatives that OTT can offer. It might be because OTT's popularity will increase the likelihood consumers will buy higher-tiered broadband services. Or it might be because cord-cutting isn't (yet) the biggest challenge facing the TelcoTV audience.
Revenue opportunities go beyond basic video. Keynote speakers Jeff Weber of AT&T Inc. (NYSE: T) and Eric Bruno of Verizon Communications Inc. (NYSE: VZ) drove home this point, but so did Calix Inc. (NYSE: CALX) CEO Carl Russo. Know your customer, look to what consumers want and will pay for, and find new sources of revenue and customer retention. Verizon's Home Monitoring and Control service is one good example of a $10-a-month additional option that won't stress telco resources, but there are many more. (See Verizon's Over-the-Top Home Control , Calix's Carl Russo: Focus on the Customer, and AT&T's Weber: Don't Overlook the Video Basics .)
Sports programming continues to rule. ESPN's Bryan Burns shared some truly awe-inspiring stats on his company's audience: 106.8 million people, ages 12 to 64, engage with ESPN each week, through its TV networks, radio shows, magazine and website, and the average person spends six hours and 35 minutes with ESPN. Multiple speakers also mentioned live sports programming as something that is both driving OTT and preventing some cord-cutting. Burns stressed the fact that one form of viewership doesn't necessarily affect the other. "Mobile usage hasn't decreased viewing of our sports networks," he says. (See ESPN: No Regrets About 3DTV Tilt .)
And we are all paying for sports -- whether or not we watch the games. According to Will Richmond of VideoNuze, the cost of sports programming accounts for 25 percent of the cost of a basic cable package. "About $3 billion a year is being funneled to sports networks from people who aren't necessarily fans," Richmond says. "If you are an entertainment-oriented consumer and don't care about sports, that is a massive subsidy."
He would argue that a viewing package tailored to the non-sports fan, pricing lower, would have appeal.
Multi-screen is certain; the business case isn't. No one doubts that tablets and smartphones are as much a part of the mix today as the laptop and TV, and that connected TVs and game consoles are increasingly as important as set-top boxes. But there is still a hodgepodge of plans for generating revenue from multi-screen -- some advertising-based, some subscription-based and all of it hinging on content rights management.
— Carol Wilson, Chief Editor, Events, Light Reading