How Close are We to an OTT Video Inflection Point?

By

The launch of HBO's over the top streaming service was followed within days by the CBS All Access over the top streaming service.

Starz likewise is launching an OTT video streaming service for Asia, Africa, the Middle East and Latin America.

It seems only a matter of time before other channels and networks also decide it is time to launch their own OTT services as well.

Likely early to move are the remaining “premium” services (Showtime, for example) or networks with dual revenue streams (other TV broadcasters make money from advertising and carriage fees) that do not benefit from direct subscriber revenues.

Whether we are near a tipping point, or inflection point, nevertheless is unclear. One might argue that the major TV broadcast networks and premium “cable channels” could offer OTT streaming without being followed in close order by the other leading ad-supported networks and channels.

There are several reasons. For one thing, many video entertainment distributors offer a substantial amount of over the top streaming access for their linear video subscribers. If convenience is the primary concern, many consumers can get the advantages of streaming access by purchasing a traditional linear video subscription.

Since such access is on a “sell through” basis, consumers have to buy the linear subscription first, to get the “no incremental cost” streaming feature.

For most “ad-supported cable networks,” a move to streaming access, if accompanied by a dropping of the linear services by distributors, would devastate ad revenue, probably without a commensurate increase in direct subscriber revenues.

What does seem clear is that the pricing of the new OTT services might save money for light viewers who only want to pay for, and watch, a few channels. If CBS costs $6 a month, while HBO costs perhaps $15 to $20 a month, then light TV viewers might spend less if they watch two broadcast TV channels, plus HBO and Netflix, for example, for a total monthly spend of perhaps $40 a month.

Perhaps the new Dish Network streaming services will be priced at about that range, and feature local TV channels plus selected “cable” network channels.

But the point is that moderate to heavy viewers, and especially families and multiple-person households, almost certainly will find the traditional linear video package offers far better value.

So the ability to choose “skinnier” programming packages and create custom packages is about to grow. Whether that leads to an inflection point for OTT video entertainment access on a widespread basis remains to be seen.

A full test of end user demand will not happen until most channels currently available in a linear video “expanded basic” tier are also available as stand-alone OTT offers as well.

Only then will consumers have to make concrete choices about what to buy, and how much to spend. 




Edited by Maurice Nagle
Get stories like this delivered straight to your inbox. [Free eNews Subscription]

Contributing Editor

SHARE THIS ARTICLE
Related Articles

How to Protect Your Website From LDAP Injection Attacks

By: Contributing Writer    3/12/2024

Prevent LDAP injection attacks with regular testing, limiting access privileges, sanitizing user input, and applying the proper encoding functions.

Read More

Azure Cost Optimization: 5 Things You Can Do to Save on Azure

By: Contributing Writer    3/7/2024

Azure cost optimization is the process of managing and reducing the overall cost of using Azure. It involves understanding the resources you're using,…

Read More

Massive Meta Apps and Services Outage Impacts Users Worldwide

By: Alex Passett    3/5/2024

Meta's suite of apps and services are experiencing major global outages on Super Tuesday 2024.

Read More

The Role of Technology in Shaping the Future of Affiliate Marketing

By: Contributing Writer    3/5/2024

In the current rapidly growing digital world, affiliate marketing is still one of the most effective ways for businesses to increase their visibility …

Read More

The Steps You Can Take To Improve Customer Service For Your Business

By: Contributing Writer    3/5/2024

When you're in a competitive market, providing exceptional customer service is crucial for the success and growth of your business. Good customer serv…

Read More