Cord-Cutting: Dirty Word or Inevitable Reality?

June 2017 – The acceleration of cutting the cord is real. So real that a recent study shows that 13 percent of U.S. homes, or one out of six households across the country, that purchases broadband access is no longer buying a multi-channel pay-TV package from its cable company. In fact, the U.S. pay-TV industry lost about 762,000 video subs in the first quarter of 2017, a worst-ever result for the period, according to a new report from MoffettNathanson. Combined with newly emerging viewing options, the accelerated cord cutting trend is creating a quickly shrinking, soon-to-be extinct, pay-TV population.

A study by the Interactive Advertising Bureau found a 56 percent increase in consumers watching their favorite program on a Streaming Enabled “Smart” TV, or through the use of a Video Streaming Device such as Roku, Apple TV or an Amazon Fire Stick. The study also found that ownership of a smart TV and a video streaming device saw double digit increases between 2015 and 2017 among adults over the age of 18. In a similar study by Nielsen, millennials, a highly digital demographic and the largest generational group in the U.S., spend about 27% less time watching traditional TV (89% among 35+ vs. 66% among Millennials) and TV-connected devices, such as smartphones, laptops or tablets, are much more valuable to them. In fact, these younger adults account for nearly half (43%) of the U.S. cordless population (defined by a study by GfK MRI) as those who have never had cable, satellite, or fiber-optic cable service and those who have cut the cord.

Clearly, societal viewing behaviors, the television ecosystem and the broadband environment is organically evolving. However, as the landscape shifts, so must the business models. Tremendous opportunities lie within the ability to monetize the new trends and align growing revenues with growing demand on broadband networks. New digital-only providers, live TV programming, and slimmer bundles are some of the newly emerging efforts on the content and delivery side. However, significant revenue can also be captured by optimizing the exponential data growth phenomenon that is currently taking place on broadband networks through improving the user experience of existing subscribers. To this end, operators must discover and truly understand the usage behaviors and respond accordingly. The ability to view usage demands and then transform the data into meaningful revenue is not only critical to an operator’s relevance, but the difference between surviving and thriving in the broadband landscape for years to come.

Winter Is Coming

February 2017 – For HBO Game of Thrones fans, “Winter is Coming” is a familiar motto that is often used by the characters to convey warning and constant vigilance to always be prepared for the coming of winter.  As streaming behaviors continue to explode and OTT content such as the Game of Thrones becomes increasingly popular at unprecedented rates, the motto is analogous to the industry’s responsibility to prepare for and manage data usage growth.

For example, OpenVault recently looked at data usage growth from December 2015 to 2016 and saw an average usage increase of 35 percent household, with an average of 155 gigabytes used per subscriber.  Interestingly, even more significant growth was observed in the median usage levels with an increase of 45 percent, which means the growing usage is across the entire customer base, not just power users.

Clearly, this usage growth will only continue.  According to The NPD Group Connected Intelligence Connected Home Entertainment Report, ownership of connected televisions and streaming media players is accelerating while the availability of streaming content is simultaneously expanding. These combined forces will continue to drive increased adoption of connected devices within U.S. households. At the same time, as the number of households that have access to OTT content surges, video streaming services are expanding their subscriber base while providing more programming.  

To this end, the industry responsibility lies within the management of this bandwidth growth to build and maintain networks that can forecast and handle the usage demands.  However, the business opportunities lie within the ability to monetize the growth and align growing revenues with growing demand on broadband networks. There is no doubt that winter is coming and those operators, content owners and distributors who diligently prepare will be better able to manage the growth and be positioned to also see substantial revenue increases.     

NFL Game Changer for Live Streaming Market

OV Lt Grey Google 320 132 2NFL insiders recently predicted that a partnership between the National Football League and an online streaming provider is the future of football viewership. In fact, in an interview with NBC Sports, Arizona Cardinals president Michael Bidwell said, “There’s no doubt it’s coming. The question is how we transition into it. What we need to do is do a great job of listening to our fans about how they want to consume NFL content. Our fans are switching to digital, they’re switching to handheld and mobile devices, and we want to respond to that.”

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Top Two Ways to Drive Incremental Revenue

OV Lt Grey Google 320 132 2In today’s global data explosion, scientists have concluded that more data has been generated in the past two years than in the entire history of mankind. Staggering data growth trends indicate that big data technology and the associated services market will grow at a near 27 percent compound annual growth rate to $41.5 billion over the next two years. Of course, one of the major sources of this massive growth is Internet of Things devices, which is projected to reach conservatively speaking, 50 billion by 2020. Simply stated, data growth, especially in video over the Internet, is bigger than big.

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OTT, Yea You Know Me… The IoT/OTT Effect on the Growing Demand for Bandwidth

OV Lt Grey Google 320 132 2As the landscape between television and OTT video seems to merge closer by the petabyte, quality data delivery is quickly becoming the epicenter for the content of all things. So while the Netflix’s of the world and other TV networks and online video companies continue to announce and launch OTT services, the demand for data will continue to grow exponentially. Add to this the huge growth in the number of Internet of Things (IoT) devices per household and you have epic demands placed on data networks and bandwidth speeds.

 

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