Cord cutting, over-the-top delivery, Netflix; a trio of challenges--or as Albert Einstein would have said, opportunities--that helped shape the IPTV space in 2010. And, by all accounts, they're likely to be just as pervasive in 2011 and beyond.
Consumers in 2010 staged a mini-revolt, if you believe some sources, to redefine their TV viewing habits. Just as TiVo and all the DVR iterations that followed ushered in the era of time-shifted TV viewing, consumers began to experiment in TV place shifting as well, looking for ways to watch--and pay for--only the content they wanted, when and where they wanted it. Bundles? Increasingly coming under fire and even Hollywood--which jealously guards the gate to its content kingdom--is starting to take notice.
The industry has gradually responded with attempts at TV Everywhere, aimed at helping pay-TV operators hold onto subscribers by offering their own version of an over-the-top solution. So far, the nascent efforts have served to only whet the appetites of consumers who are looking for more content a la carte, on the go, and on every device they own.
OTT delivery has taken many forms, from software like Boxee, to hardware like Roku, Apple TV and the increasingly beleaguered Google TV, which launched with significant fanfare, only to skulk back into the lab for more work, a device that really wasn't ready for its prime-time slot.
One of the biggest potential threats to the industry, Netflix, began focusing more time and energy on streaming movies rather than sending DVDs through the mail. Its stock--with Wall Street and with consumers--has gone through the roof. Operators worry their own VOD services will suffer because of the increased competition.
Other options, like the increasingly popular ivi TV, which calls itself an online cable company, also exploded onto the scene, promising to stream live broadcast channels from cities around the U.S. (currently Seattle, Chicago, L.A., and New York), for $4.99 a month. Not surprisingly, it's facing a lawsuit from broadcasters who say it's infringing on their copyrights.
But, while the cable industry is slowly seeing its subscriber base nibbled away, AT&T's U-verse and Verizon's FiOS TV have had record-setting years, collecting subscribers--and revenue--at an accelerating pace.
Across the country--and the world--IPTV deployments have accelerated.
Pyramid Research, as part of a broader report looking at the prospect for the overall communications market in the U.S, is forecasting that IPTV services revenues in the U.S. may reach $15 billion by 2014.
ABI Research said it expected IPTV market share to more than double by 2015 worldwide.
Meanwhile, every operator is running into a new challenge: escalating carriage and retransmission fees that have pitted pay-TV operators against content providers and broadcasters seeking to squeeze more money out of the industry as their own profits continue to come under siege from online video options. Fox blocked its content from Cablevision during a contention retransmission fight that left three million Cablevision subscribers in the New York Metro area without access to the World Series, some pro football games and its hit shows like Glee. Cablevision CEO Jimmy Dolan took the fight to Washington, but didn't get any help. Eventually, the MSO agreed to pay what it said was an "unfair" retransmission fee. On paper, Fox and parent News Corp. won, but neither Cablevision, nor many of its subscribers, are likely to forget the brouhaha for a long time. And, it wasn't alone. AT&T dropped two Hallmark channels, saying the programmer wouldn't give it a fair deal. Dish Network, DirecTV and other service providers have begun to dig in their heels as costs continued to climb.
Of course Comcast's pursuit of an acquisition of NBC Universal, and the havoc that merger is likely to wreak on content providers and other pay-TV operators who will have to negotiate with competition for access to content, continued to drag on for almost the entire year. Still, the question there isn't if the nation's biggest MSO will be allowed to acquire NBCU from General Electric, but when. That, perhaps, is a story for next year. -Jim
P.S. FierceIPTV will be off for the holidays starting Thursday afternoon. Be sure to look for us in your inbox, Jan. 4. Have a safe and joyous holiday.