Wednesday, June 15, 2011

IPTV Challenges Cable

More news on the emerging transition in TV from traditional broadcasting and multichannel services to IPTV..

Netflix is emerging as a driving force pushing IPTV.  A new study shows that Netflix users are twice as likely (this year as compared to last) to degrade or cancel cable subscriptions.  Meanwhile, content licensing is becoming more competitive, with Netflix making exclusive deals for TV programming.  While cable creates walled gardens limiting access to other services, and touts "TV everywhere" at some point in the future, Netflix is already there, with its service offered on more than 250 devices, some of which offer a dedicated Netflix button on the remote..
Meanwhile, a new report from Nielsen concludes that there's a new trend in homes with both TV and Interent access shows that
the lightest traditional television users streaming significantly more Internet video via their computers, and the heaviest streamers under-indexing for traditional TV viewership.  This behavior is led by those ages 18-34... while certain segments of the population are migrating toward specific services and viewing habits, the resounding trend is (for slight increases in total viewing across screens)
Nielsen's new C3 ratings are also showing significant numbers of additional viewers coming from online viewing.  A CNN executive reported that more than 50 individual telecasts saw significant ratings improvements with the addition of online viewers.
To pile on the bad news for traditional TV, a new Harris Interactive Poll for Adweek looked at media and online video use and attitudes towards the Internet's relationship to TV.  The results showed broad increases in online video use, with 77% indicating they've watched shows online.  Use was highest in the 18-34 demographic (at 88%), but remained high for all demographic segments, all the way through the 55+ segment (64% have watched).  In addition, about half indicated that they have watched shows online that they had not previously seen on TV, suggesting expanding choice options online.  Wide adoption of online video makes IPTV a stronger competitor to cable and DBS services.  In fact, 44% of respondents said they would cancel cable if they could get the shows they liked online for free.  That number falls to 16% if their shows were only available online for a small fee.  Still, at a time when cable has been losing subscribers consistently for years, and IP-delivered video choices are increasing (with AT&T's U-verse and the rise of streaming providers), of  it's not good news for cable and DBS.
If this wasn't bad enough, consider the continued maturation of user-generated-content (UGC) and UGC-sharing sites like YouTube.  Improvements in technology enable users to create higher-quality content.  In addition, YouTube and similar sites are providing opportunities for the distribution of professional quality content and traditional TV programming. The programming options and reach of UGC channels are only getting bigger, and a lot of content is getting better, making it a stronger competitor to traditional TV for both audiences and advertisers.
All these show an improvement in the access to IPTV, and improvements in its value coming from better content, more programming options, and more choice in when and where viewing occurs.  While cable and DBS can respond to some of these, an emphasize on keeping subscribers tied to their services is not helpful.  Look for a continued decline in cable and other multichannel services, and continued expansion of IPTV as a delivery system for video.

"Who are we kidding? Of course it's Netflix vs. cable," Gigacom
"Heavy Streaming Vidoe Viewers Watch Less TV, Nielsen Says" Media Daily News.
"Turner Discloses Tens of Thousands Of Online Viewers Being Added To Its TV RatingsMedia Daily News
"Survey: Sure, We'll Ditch Cable... Make an Offer!Vidblog
"UGC Is All Grown Up!" Online Spin

No comments:

Post a Comment