7% of households will cut pay TV by 2012

Trender Research, a consumer technology market research and consulting firm, has released a strategic analysis of the over the top (OTT) video industry and its impact on the Pay TV market. The report, entitled "Pay TV and the Growing Over the Top Video Threat", analyses the major trends of online video consumption and how they are changing the business models for cable, satellite, and IPTV service providers as well as the video rental market.

Trender predicts that 7 per cent of households will forgo their pay TV subscriptions by 2012 in favour of some combination of OTT services and free over-the-air broadcast television.

"The good news for pay TV service providers is that the 80/20 rule applies in the case of OTT video," said Trender Research CEO and Principal Analyst Brian Mahony. "The vast majority of consumers will not consider abandoning the familiarity, comfort, and content of traditional television until several obstacles to OTT adoption are overcome." Among the OTT obstacles highlighted in the report are limited live TV, sports, and high definition content, and the relative complexity of setting up and using OTT devices and network.