Six years ago, one of my company’s co-founders said to m,e “we don’t have a TV at our house.” No TV?! I remember feeling surprised at how nonchalant he was when he explained that they just watched shows on the Internet. Fast forward to 2015 and suddenly he looks like a trendsetter as online streaming services and over-the-top (OTT) options emerge as popular alternatives to the costly monthly cable bills. But is this the year that the promise of OTT actually becomes a mainstream consumer reality? Are you really ready to cut that cord?
If the news at this year’s Consumer Electronics Show (CES) is any indication, one can safely assert that OTT has officially arrived and it is easier to experience than ever. Everywhere at the Las Vegas event companies were launching or previewing their OTT plans. Established media players, including HBO, Showtime, and CBS, seemed to acknowledge the change afoot and detailed plans to offer their own standalone online video services this year. Sony even showcased a streaming-only TV service, Playstation Vue, which promises to avoid the long-term commitments that cable companies often demand. And the belle of the CES ball was DISH TV with their Sling TV which took home the award for Best of the Best at the show as well as awards in the Best Home Theater and Best Software categories. This new affordable TV service promises to help consumers “Take Back TV” by providing a collection of live cable TV channels across a variety of devices starting at just $20/month.
The OTT news didn’t stop there though. Streaming video services like Netflix an Amazon Prime Instant Video also racked up more viewers, as Internet-only shows like House of Cards grew in popularity and award-recognition. Before the month was over, we also saw some technology giants, like Verizon and Overstock.com, hint that they might get into the OTT act as well. In a recent interview with Investor’s Business Daily, Michael Goodman, an analyst at Strategy Analytics said: “Assuming the FCC enables OTT providers as a viable entity, you’re going to see a lot of companies try it. Google could be one.”
With more and more announcements appearing everyday it is clear that the media and entertainment sector is undergoing a technology disruption of epic proportions. What is driving this surge of OTT change? The consumer. According to research firm SNL Kagan, the number of Americans who pay for TV through cable, satellite or fiber services experienced its first full-year decline in 2013 and those losses only grew last year. A recent report by MoffettNathanson Research reports that broadband-only homes have risen to become 2.7% or just over 3 million of the 115 million sample of homes they survey – with many industry leaders arguing that the number in reality is actually closer to 10 million. This trend will likely continue to grow as millennials increasingly refuse to be tied to a single cable provider for their content and long-time cable TV viewers start to ditch their $90/month bills for a bundle of channels in favor of more affordable OTT options.
Image courtesy of Sven Scheuermeier for Unsplash.