It's time for pay TV to blend the best of linear, on-demand and OTT

Jim Barthold, FierceIPTVI wake up each morning and toss a blend of coffee beans into the grinder in anticipation of my morning pot of caffeine. During the day, when in the car, I listen to a blend of hits thanks to my Sirius XM subscription or, if at home, a blend of oldies thanks to the only local station I can pick up. In the evening I relax with tea brewed from a blend of tiny little tea leaves gathered just to make my nights more relaxing.

I could go on, but I think you have the idea. Life's a blender and everything we do and consume and even wear comes out as a blend.

That's why I'm surprised that until Virgin Media's (Nasdaq: VMED) announcement today that it was setting up a Netflix app on its Virgin Media TiVo service, no pay TV service provider had decided to blend an Internet-enabled subscription service into its traditional lineup of games and on-demand and pay-per-view and linear content. It seems so logical, given the capabilities of IP-enabled TV entertainment platforms.

Looking at things through an historical lens, blended TV, as I like to call it, seems inevitable. Consumer demand and a changing subscriber base dictate that it must happen, just as television itself had to happen despite the fears and resistance of the movie industry. Premium services and later ad-supported cable programming had to happen, despite the fears and resistance of the broadcast industry. And Ultra HD will have to happen, despite the fears and resistance of pay TV providers worried that bandwidth demands will outstrip bandwidth reservoirs.

In each instance, a new idea came up--or in the case of Ultra HD (aka 4K) the idea is still coming--and consumers embraced it. In most instances, technology was the ingredient that cracked the status quo. Today's technology, and most particularly the new impetus behind HbbTV or hybrid TV, is pushing blended TV into the public consciousness.

What's somewhat disturbing, at least from the outside-looking-in perspective, is that pay TV providers seem to be resisting the blend. MVPDs, especially among more traditional lines, are losing subscribers and seeing their bases threatened by cord cutters and cord nevers. Instead of looking for ways to bring these subs back into the fold via the IP technology at hand and the willingness of OTT outsiders to become insiders, they're resisting.

History says resistance is futile.

The pay TV business has a history that is rife with missed opportunities and catch-up efforts. Cable operators made already-difficult VCRs operational nightmares for the consuming public in an effort to preserve some precious premium service content dollars. That worked so well that TiVo was spawned in the personal video recording space--and cable and the rest of the industry played catch-up with their own digital video recording options.

Today the pay TV service providers see OTT as a competitor, bent on stealing away subscribers already inclined to go in that direction. To its credit, Virgin Media sees OTT, and its avowed leader Netflix, as a complement. It is blended TV at its best and it is, like it or not, the way of the future.--Jim