Report: OTT to chip away at pay TV premium services

A report from The Diffusion Group (TDG) claims that there's been too much attention focused on over-the-top as a cord-cutting phenomenon and not enough on the ability of nontraditional content to erode pay TV's traditional premium services tier.

Industry conversation, a TDG news release said, "has been derailed by a premature focus on so-called ‘cord cutting' when in reality the opportunity/threat lies in chipping away a pay TV's ‘premium' offerings like HBO."

The TDG study predicted that 250 million households will view OTT video by 2016--as opposed to 106 million in 2010--but "this is but 51 percent of the households that will be capable of receiving OTT TV services in 2016."

HBO, meanwhile, is not sitting on its hands watching OTT erode its subscriber base. The premium service said it is close to finalizing deals with its final two distributors--Time Warner Cable (NYSE: TWC) and Cablevision Systems (NYSE: CVC)--for its new HBO Go product.

For more:
- see this news release
- Broadcasting & Cable has this story

Related articles:
SNL Kagan analyst: Can't ignore OTT, cord cutting pressure on pay-TV industry any longer
Cord cutters and OTT video: Do they stand a chance against cable?
CEA study finds Americans not rushing to cancel pay TV service
Time Warner gets Q1 boost from television business; movies lag

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