That said, the debate around what to do about the unprecedented growth of the Netflix phenomenon now seems to be a moot point – as incumbent pay-TV service providers openly acknowledge its disruptive impact on the traditional video entertainment industry. And, now they’re proceeding with their plans to execute their long-awaited counter strategy.
Clearly, 2011 could prove to be a pivotal year for testing new business cases, as the marketplace becomes more fluid and is subject to further significant changes that are on the near horizon.
While it’s perfectly understandable that incumbent pay-TV service providers might prefer to bundle a Netflix-like, on-demand IP video service offering with their standard digital cable tier subscriptions, let’s remember that this is but one potential scenario.
Revisiting the results of the Cisco market study, it’s interesting that note that – by far – “the most likely motivation to pay for an online video package…” is a low price point. Call this the “value-based” market segment, if you will – it likely includes some current subscribers and previously lost customers. To win-back these prior subscribers, such as those that are looking at more of an iTunes or Hulu approach to catch up on their TV, an unbundled IP VOD offering by the provider could be very attractive.
When you think of the broadcast video entertainment arena, it seems to have been centered upon the notion that there’s a huge undifferentiated mass-market of consumers who — by and large — all want the same thing.
Incumbent pay-TV service offerings have tended to follow this belief, by delivering a small set of standardized service packages. And for the longest time there’s been no compelling need for traditional service providers to more closely scrutinize the market segmentation variables.
Now though, we’re clearly seeing a shift in the marketplace, that reflects an acknowledgement of the growing market fragmentation. In an on-demand, personalized world some service providers are already voicing their intent to offer more flexibility in their pay-TV service options and associated pricing.
Granted, a small subset of U.S. pay-TV subscribers have, for a number of different reasons, decided not to wait for their incumbent service provider to introduce more granular or flexible service packages. These people are among the early-adopter cord-cutters that have been equally vocal about their preference for alternative value-based offerings.
We’ve been intrigued by these recent developments, and so we commissioned a market study to learn more about the potential for increased diversity of U.S. pay-TV customer needs and wants. The following are some highlights of what we were able to uncover. Read More »
While traveling this week I had the opportunity to read David Meerman Scott’s great new book, Real-Time Marketing, dealing with the new ways that marketers are engaging with their customers. It is a definite worthwhile read, full of examples of how the case studies highlighted there could be applied to our business…but what struck me was that TV isn’t really as much of a factor anymore as it used to be…
In industry journals, there has been an on-going debate about the extent of “cord-cutting,” the act of a consumer like you or me (also considered a subscriber by the service providers themselves) deciding to cancel their cable or IPTV service now that they can view a show via the internet, say from a service like iTunes or Hulu in the U.S. Conflicting statistics are being quoted left and right by different sides of the argument, which reminds me of Chris Brogan’s hilarious quote at a presentation I saw him give this Summer which, paraphrased, is “83.7 percent of all statistics are false.” Now I’m not saying one side or another is false but are likely just looking at the situation from different perspectives. Regardless of who’s right and what the extent really is, there is certainly some element of truth to it which means TV isn’t as much of a factor anymore as it used to be…
Personally, I wouldn’t want to get rid of my TV service. Without being able to get my Formula 1 fix or watching the Longhorn game (which in Austin is mandatory for citizenship), it would be like all the sacrifice but none of the grace of joining a monastery. But I have to admit that in my daily life, I am spending more time than ever with my tablet, PC, and phone…and as much as I love my TV, it isn’t really as much of a factor as it used to be… Read More »
One clear trend, here at the close of 2010, is the rise in importance of Content Distribution Networks, or CDNs, to cable service providers.
Here at Cisco, CDNs are similarly front-of-mind.
In this video, I outline three drivers for the growth of Content Distribution Networks (CDNs) in service provider networks:
To more easily reach video-capable, IP-connectable end points, with more types of video assets
To centralize movie and video asset distribution, instead of manually populating hundreds of distributed video on demand servers
To attract new revenue sources, such as wholesale content distribution.
Our ongoing work with British Telecom, for instance, helped them establish an important and new business model: Extending BT’s quality of service (QoS-)enabled CDN to their broadcasting and media partners, within the YouView [Canvas] initiative.
Plus, as service providers prepare competitive video offerings to serve screens beyond the television - an undeniable trend across our customer base - CDNs provide a great mechanism to scale streaming video.
Let’s face it - dancing cats are cute and apocalyptic visions of the future without IPv6 can be entertaining, but a glitch or two…or a “video not available” won’t violate any service level agreements. But what happens if the FIFA World Cup broadcast goes down? Or the “Auburn-Alabama” football game? Or the amazing live video feed of those copper miners in Chile being rescued? Millions will know immediately, and if it’s a paid event - millions of dollars of advertising or pay-per- revenue could be lost.
As it happened previously with voice, video transport is now moving from TDM to IP and this brings many benefits in terms of flexibility, the potential for application integration, and the opportunity to reach new customers watching on mobile and computing devices. However, this creates a new set of challenges for today’s operators - to not just carry a diverse set of video formats, but also to more endpoints while still ensuring a uniform high quality of experience.