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Comcast, Dish, DirecTV and Verizon Post Postive Subscriber Growth, Despite OTT Threat
US Pay TV Operators Add 1.7 Million New Subs in Q1'10
Boston, MA - June 17, 2010 – US pay TV service providers added nearly 2 million additional subscribers in the first quarter of 2010, despite an increasing threat from so-called “Over the Top” (OTT) services such as Netflix, Hulu, and YouTube, according to a report just published by analyst firm Strategy Analytics.
The report, “Over-The-Top vs. TV Everywhere: How Disruptive is OTT to the Pay TV Business?” concludes that while the reaction to OTT has been perhaps overhyped, online distribution does pose a potential threat to the traditional pay television model. Nevertheless, pay TV providers such as Comcast, Dish, DirecTV and Verizon appear unfazed, as they post positive net subscriber additions on a quarterly basis.
“Over-the-top video services—both ad-supported and paid—are widely viewed as a threat to pay TV operators,” said Jia Wu, Analyst at Strategy Analytics Digital Consumer Practice and author of the report. “However, despite the disruption caused by OTT, US pay TV providers continue to grow both revenues and subscribers.”
The threat of OTT must not be completely ignored, however. Survey research conducted by Strategy Analytics in 2009 showed that US consumers perceive a relatively low “value for money” for pay television services. The pay television industry is banking on its “TV Everywhere” initiative, aimed at offering subscriber content on multiple screens, to counter the threat of OTT, according to the report.
“While the adverse effects of OTT to-date may be minimal, one should not overlook the threat it poses to traditional pay television models in the future,” noted Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service. “OTT services can potentially capitalize on pay TV’s biggest shortcomings, namely a lack of flexibility in selecting channel packages, and a low perceived value for money.”
Analyst blogs:
http://blogs.strategyanalytics.com/dcp
http://www.multiplayblog.com
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