The cycle that surrounds announcements of big news in any industry is pretty fascinating, but the one that surrounds the OTT segment is more unique than many. It generally works something like this:
Someone who knows someone who's close to someone in a company (or even a supplier) hears a rumor about a new product/service/device that's in the works. That rumor begins to spread (somewhat like the Breck shampoo commercial: And they tell two people, and they tell two people, and so on...) until it gains enough critical mass to reach blogable status, then it's in several more blogs and then, viola, it's news.
What's interesting is that, more often than not, the rumor turns out to be true, at which point it's examined from every side, judgments are made about its value in the ecosystem, and then the truly critical (and I do mean critical) analysis really begins. That's the point where anyone who can say, "Nah, it's not going to work," does so. And the cycle goes on.
Apple TV, Google TV, and Amazon's latest foray into over-the-top delivery of video content are prime examples of the cycle. Right now, they're in the "Nah, it can't work phase" for all three.
Apple's rental-only mode for content from Fox and Disney turns off users who want to actually have a few TBs of content stored at home that they own. Conversely, Amazon's play, which allows users to purchase content, is being criticized for its lack of recent content. And, poor Google TV can't get any content to play with at all.
But, as Teddy Roosevelt once said, "it's not the critics who count... not the ones who point out where the doer of deeds could have done better," it's all about, in this case, the consumer.
Analyst Paul Erickson, of IMS Research, says Apple's facing a heck of a battle, and he predicts woe for Apple TV, saying the price reduction for the device (to $99 from $200) and new content options may not be enough to get it to the same level as Blu-ray players, game consoles and the new generation of connected TVs that are on their way to market, adding that the Apple device may be too simple and not versatile enough.
"Apple TV faces the strongest competitive environment for over-the-top video to date," he said. "It does not seem to address a sufficient enough value gap in the market to entice consumers, due to the similar functionality that is already integrated into the Blu-ray Disc players, game consoles, and connected TVs they've already bought or are buying today."
So, will any of the services find traction at home, in the living room?
Netflix certainly has; its 15 million subscribers, the majority of whom stream content, have made it pretty plain that they like to have unlimited access to all the content they can get their hands on. To a lesser, but still impressive extent, so has Hulu, which has been water cooler conversation among younger users since it launched.
The New York Times this weekend wrote about some of the obstacles facing Apple TV, rivals primarily, and the lack of consumer education about Internet TV. It also made an off-hand comment about how the iPod, introduced in 2001, initially didn't do well because it was too Applecentric. Today, it's changed the entire music industry.
Google TV, Apple TV, Netflix, Amazon TV and Hulu (and yes, Boxee and Roku, too) all will have a hand in changing the pay-TV industry. How are you going to make that work for you? -Jim