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Video services

Reinventing the Pay-TV Business

Is the pay-TV model collapsing or just in need of a major upgrade?

With the North American pay-TV industry now losing subscribers, OTT services gaining rapidly and cord-cutting on the rise, the traditional television model is certainly under assault as never before. In the US, for example, the number of TV households without a pay-TV subscription will climb to a sizable 26.7 million in 2019, up from 18.6 million in 2008, according to the latest projections by IHS Inc. late last month.

As has been widely reported, the cable industry is particularly feeling the weight of this unprecedented decline. Although cable still rules the pay-TV space, at least in North America, the industry is shedding video customers by the millions each year. As a result, cable operators barely command 50% of the slowly but steadily dwindling pay-TV market today. (See US Pay-TV Providers Pile Up New Losses.)

All that doesn't mean that the traditional pay-TV business is, well, going out of business anytime soon. After all, there are still something like 100 million pay-TV subscribers in the US alone. They are not going to just go away overnight.

But what it does mean is that, at the very least, the pay-TV business is morphing into something quite different, some kind of amalgam of traditional big cable bundles, skinny bundles, à la carte services, direct-to-consumer offerings, on-demand choices, multiscreen video options and broadband video. In a few years, we may not even recognize the new creature that consumers call paid television service.

We'll be looking this week at where the pay-TV industry is heading as it faces its most serious competitive threat in its 65-year history. At Light Reading's inaugural BTE Video Summit Tuesday afternoon, four back-to-back-to-back-to-back panel sessions will take stock of the rapidly changing video market, exploring and examining such major developments as the rise of on-demand and OTT video, the emergence of cloud DVR service, the spread of multiscreen video and the launch of 4K video service.

How will all of these developments change the nature of paid video content? Is linear TV viewing an endangered species? Will the traditional cable bundle survive? Can OTT and conventional pay-TV services be integrated? How will service providers cope with the additional bandwidth demands of these new video services on their networks? Is 4K really just the new 3D? What will it take to make UltraHD a reality? How can network operators monetize these new services?

All good questions. We'll be seeking some good answers, or at least some plausible theories, at the BTE Video Summit tomorrow afternoon. So, if you happen to be in the Chicagoland area, stop by McCormick Place's Lakeside Center from 2 p.m. to 5 p.m. CST. And, if you can't make it to Chicago, watch for our Video Summit reports over the next few days, as part of our extensive coverage of the entire Big Telecom Event.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

Ariella 6/8/2015 | 3:40:15 PM
Pay-TV I know it doesn't work this way, though I get an image of the pay-meters that had to be fed for gas in British houses. Instead of getting billed at the end of the month for usage, they would have to insert coins to get heat.
kq4ym 6/9/2015 | 6:49:25 PM
Re: Pay-TV It will be interesting to see what the industry can come up with to stem the loss of customers. With Netflix growing steadily, even they are faced with folks who opt for free entertainment via Hulu with ads and Crackle. Even the public library is getting into the race with Hoopla offering library patrons across the country online "checkouts" of movies and audio books without commercials.
Ariella 6/9/2015 | 7:20:28 PM
Re: Pay-TV <. Even the public library is getting into the race with Hoopla offering library patrons across the country online "checkouts" of movies and audio books without commercials.>

I suppose that supplants the more old-fashioned lending out physical videotapes that were then supplanted by DVDs. The problem with that, I've found, is that the discs were often damaged and failed to play. 
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