By 2020, TV Will Be a 'Must Have' Telco Service, Globally

By Gary Kim August 14, 2014

By 2020, half of all TV content viewed globally will happen on-demand, instead of live and linear, Ericsson predicts.

Also, in 2020 mobile broadband users will will exceed eight billion subscribers, while fixed network broadband will be used by one billion consumers at home, representing around 75 percent of digital TV homes, Ericsson predicts.

At the same time, the subscription TV subscriber services market alone will be worth $460 billion, not including the value of advertising.

All of that is likely to have key revenue and capital investment implications for mobile and fixed network access providers. In fact, should AT&T successfully acquire DirecTV, video entertainment would become AT&T’s single largest revenue stream, followed by high speed Internet access, with voice dropping to third as a driver of revenue, sometime late in 2014 or early 2015.

That likely would make AT&T the first of the tier-one telcos globally to achieve repositioning of its revenue sources, essentially giving AT&T the revenue profile of a U.S. cable TV company. For Comcast, for example, video is the single largest revenue source, high speed access second and voice third.

Mobile data traffic will grow at a 45 percent compound annual growth rate between 2013 and 2019, Ericsson predicts. That will result in an increase in mobile data consumption by the end of 2020, over a seven-year period.

Mobile broadband is essential in all regions and fundamental in emerging regions. And that mobile data consumption increase mainly is driven by video.

By 2020 there will be 15 billion connected devices that are video enabled.

Ericsson also argues that content delivery networks are "likely to be a compulsory component of any premium pay TV service", while “freemium” business models may be forced to rely on best effort access.

That managed approach likely will extend all the way to the customer device and location, despite network neutrality concerns. As with other developments such as sponsored content or featured content, innovation might demand that Internet service providers are free to create many types of retail offers that, in fact, do not treat all apps equally.

Paradoxically, even as content consumption moves to on-demand formats, bundling of content and access remains the “ultimate opportunity” for telcos and cable TV companies.

Another way of putting that is to say video entertainment and broadband will drive core revenues.

That might seem odd. The Internet and changing business drivers increasingly will allow content to be viewed on demand, unbundled from linear subscription formats.

At the same time, bundled subscriptions will provide much of that content. By 2020, many telcos will find their revenue depends on video entertainment. Video will have shifted from a "nice to have" revenue source to a "must have" source. 




Edited by Adam Brandt

Contributing Editor

SHARE THIS ARTICLE
Related Articles

Consumer Privacy in the Digital Era: Three Trends to Watch

By: Special Guest    1/18/2018

Digital advertising has exploded in recent years, with the latest eMarketer data forecasting $83 billion in revenue this year and continued growth on …

Read More

CES 2018: Terabit Fiber - Closer Than We Think

By: Doug Mohney    1/17/2018

One of the biggest challenges for 5G and last mile 10 Gig deployments is not raw data speeds, but middle mile and core networks. The wireless industry…

Read More

10 Benefits of Drone-Based Asset Inspections

By: Frank Segarra    1/15/2018

Although a new and emerging technology, (which is still evolving), in early 2018, most companies are not aware of the possible benefits they can achie…

Read More

VR Could Change Entertainment Forever

By: Special Guest    1/11/2018

VR could change everything from how we play video games to how we interact with our friends and family. VR has the power to change how we consume all …

Read More

Making Connections - The Value of Data Correlation

By: Special Guest    1/5/2018

The app economy is upon us, and businesses of all stripes are moving to address it. In this age of digital transformation, businesses rely on applicat…

Read More