Smarter 'Dumb' TVs Will Drive OTT Adoption
Smart TVs may be limited by clunky UIs, but "dumb" TVs are getting smarter all the time. And thanks to connected game consoles and media streamers like Chromecast and Roku, those not-so-dumb TVs are set to drive a major surge in adoption of over-the-top video services.
A new report by Juniper Research predicts that subscriber numbers for OTT television services will jump more than 250% from 92.1 million globally in 2014, to 332.2 million by 2019. The report specifically mentions TV services from Netflix Inc. (Nasdaq: NFLX) and Amazon.com Inc. (Nasdaq: AMZN), but alludes to other offerings as well. A handful of programmers, including Home Box Office Inc. (HBO) and CBS Corp. (NYSE: CBS), already market their own OTT services. Dish Network LLC (Nasdaq: DISH) has also made headlines with its Internet-based Sling TV service, and Verizon Communications Inc. (NYSE: VZ) and Sony Corp. (NYSE: SNE) are among the other big players said to be preparing new online TV packages. (See Broadcasters Eye OTT Bonanza and Verizon Scores New OTT Content Deals.)
According to Juniper Research, North America is the leading market for continued OTT growth, but Asia follows closely behind.
Traditional TV operators recognize both the threat and the opportunity in online video. Operators are using TV Everywhere apps to bring their services to multiple screens and introducing new features like cloud-based DVR to add value to the subscription experience. Most of the content that service providers offer online is available on-demand, but linear TV streams are on the rise.
In addition to TV Everywhere apps, service providers are also examining opportunities with the new VidiPath specification from the Digital Living Network Alliance (DLNA) . VidiPath will allow consumers to stream subscription content to certified devices (including tablets and TVs) while maintaining a consistent user interface across multiple screens. At the recent Internet & Television Expo, several companies demonstrated VidiPath functionality, including Comcast Corp. (Nasdaq: CMCSA, CMCSK) with the X1 platform, Broadcom Corp. (Nasdaq: BRCM) with a client set-top, Samsung Corp. with a client TV, LG Electronics Inc. (London: LGLD; Korea: 6657.KS) with a WebOS TV running client software from JetHead Development, and AwoX with a reference tablet device. (See INTX: A Viewing Guide to Cable's New Show .)
ABI Research predicts that VidiPath-certified devices will hit 70% penetration of cable households with advanced services in the US by 2020. The cable industry hopes that the flexibility of VidiPath will help keep viewers tuned to their own services and make subscribers less likely to abandon traditional pay-TV in favor of cheaper OTT options.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading