Video services, pay-TV and OTT set for big change

Michelle Clancy ©RapidTVNews | 10-01-2012

Consumer viewership of online video has dramatically increased in the past few years, and this trend will continue in 2012, according to a research note from Parks Associates.

Most importantly, consumers have acquired an increasing number of platforms they can use to watch digital video. Throughout the course of 2012, households will consume more and more video on mobile devices like tablets and smartphones.
Nearly 70% of US broadband households viewed online video on their PCs at least monthly in 2011, compared to 38% in 2006. And, Netflix recently announced that its members around the world viewed more than 2 billion hours of content in Q4 2011 alone.
Parks said that this trend will impact ARPU and overall revenues for pay-TV operators and resonate throughout the content ecosystem in 2012. In the past twelve months alone, a full 12.7% of U.S. pay-TV subscribers downgraded their pay-TV service.
That does not mean that pay-TV operators will stand idly by. They will continue to explore new and creative ways to monetise their investments in VOD and multiscreen delivery systems as a deterrent to subscriber and revenue loss due to online video and OTT services. And, they're making progress: By mid-2011, 80% of U.S. pay-TV subscribers could receive on-demand content on a non-TV screen in their home through a service provided by their pay-TV provider. By the end of 2012, the impact of multiscreen offerings on subscriber churn and business models will be clearer to operators, Parks noted.
There are a few bright spots for pay-TV beyond multiscreen reach. Fuelled by growing economies and foreign investment (particularly from Western Europe), Latin America is a hotbed for television delivery systems and services, the firm found. Of all global markets, Latin America is the fastest growing market for pay-TV services, increasing by 18% between 2010 and 2011.
Also, consumers are becoming more comfortable with personalised TV and Internet advertising. More than one-third of TV and Internet users are comfortable with personalised TV and Internet ad targeting techniques, at 38% and 34% respectively. Generally speaking, consumers are more comfortable being targeted by advertisers (involuntarily) and less likely to provide personal information in order to receive ads for products or services of interest.