It's that time of year. Fresh snow on the lawn, crisp, clear, night air, and an odd urge to make predictions about the IPTV industry. Here's what my crystal ball--and remember, this is a crystal ball, not insider information--has to say about the industry in the coming year.
Here's my safe prediction for IPTV in 2011: It's going to continue to grow in the U.S. as Tier 2 and Tier 3 telcos find more affordable, easier to deploy models that will help them defend their turf from satellite and cable operators. At the very least, each telco that deploys IPTV in new markets will gladly accept the 5 percent cable erosion that they'll get as the new player in town, a number that seems destined to grow as cord swapping from cable to alternative delivery options continues through the next four quarters. (To that point, anybody out there willing to bet the farm that cable doesn't see continued losses in 4Q10and beyond?)
AT&T and Verizon both have had a strong 2010, and they'll see more growth in new and existing markets in 2011.
Telcos, just like MSOs will feel pressure from OTT delivery options like gaming devices, Roku, Boxee Box and the rest. But, as IPTV continues to mature, the interactive aspect will prove alluring to consumers.
Advertisers, too, will begin to leverage IPTV's ability to target advertising.
Analysts estimates on worldwide IPTV adoption continue to climb. A recent MRG study forecast that by 2014, there would be 102 million IPTV subscribers; that's up from some 28 million last year. And MRG's not alone. SNL Kagan, Strategy Analytics and Point Topic all predict continued growth.
Comcast says ‘aloha' to Hulu; sends it packing
Verizon's Ivan Siedenberg said it best more than a year ago when he said that Hulu eventually "won't matter." Eventually will finally arrive this year. Hulu, which once was the best thing since sliced white bread (a $200 miillion IPO was rumored, remember), by the end of the year will be about as stale.
While Comcast has had to suggest to the FCC that it won't mess with Hulu after it becomes part owner--once the FCC allows the MSO to go though with its acquisition of NBC Universal, (which, along with News Corp. and Disney owns the service)--but you don't have to be a rocket scientist to see that it really doesn't have a home in Comcast's portfolio, especially since it would be in head-to-head competition with the operator's TV Everywhere initiative, Xfinity.
And, despite Hulu's claims that it brought in $260 million in revenue during 2010, some 160 percent more than it recorded in 2009, the service is still just a minor blip on Comcast's radar. Hulu Plus? In the end a minus, just one more subscription service that Comcast will have to manage.
Hulu already is battling its own owners for content and advertising slots, has seen both Disney and NBC offer content to what is fast becoming its mortal enemy, Netflix, and continus to battle viewer perception about the value of its premium subscription play.
Snip. IPTV players benefit as cord-cutting continues to erode the cable subscriber base
Is cord-cutting a real phenomenon? Is it the product of a bad economy? The result of subscriber dissatisfaction with cable TV operators? Is OTT delivery really poised to make a dent?
Yes. Yes. Yes and... yes.
2011 will be the year a hybrid solution materializes as pay-TV providers begin to take the rise of OTT more seriously and look for a way to catch the wave. While cable providers continue to ignore the phenomenon, IPTV providers see an opportunity and concoct a winning recipe: a healthy dash of IPTV, a dose of OTT delivered over increasingly expensive broadband that the IPTV provider controls, and perhaps even a broadcast component, a la Sezmi.
The new hybrid approach takes the best of IPTV-popular programming delivered with consistent quality-and the best of OTT--an array of independent programming, video on demand and all that the Internet has to offer-and combines it into an offering that makes cable's TV Everywhere look like a rapidly aging dinosaur.
Google TV makes a comeback and brings content with it
Pity poor Google TV, an idea gone bad in a hurry and helped along by a Hollywood that feared helping it in any way would cost the content establishment dearly.
An earnest Eric Schmidt, CEO of Google, introduced the smart TV as a friend to content providers, promising to bring their content to millions of new viewers while protecting it from piracy. Unfortunately, many of the Hollywood poobahs saw Google as a carpetbagger, convinced it would sweep into Tinseltown and reap huge rewards from advertising the content owners would never get a piece of. Google and Schmidt didn't really have an argument to counter the belief and so the much-ballyhooed platform went back into the lab late last month for more work.
Look for it to relaunch this year with a new business model that might even include its own content network or, at the very least, deals with some independents that can help make it more attractive to consumers who, while they think they might want a Google TV, really aren't anymore comfortable with it than those Hollywood executives.
Who knows, maybe it'll buy Netflix. But that can't happen, because...
Apple makes a move on Netflix in 2011
Can it be any more obvious that Netflix isn't long for the world as an independent entity?
The DVD delivery service isn't red hot, it's sizzling. But Netflix is poised to begin being hamstrung by its own success. Content providers are very worried by it, and, despite looking at a significant windfall coming down the pike in the form of postage savings as it moves away from postal delivery, it's also looking at rising content acquisition costs. For example, Time Warner CEO Jeff Bewkes positively seethes when he talks about Netflix and has vowed it will pay dearly for any new content from TW's Starz movie service.
Google may covet Netflix, but a Google-owned Netflix would simply inspire the same fear as Google TV does among content owners.
Apple, meanwhile, has long-standing relationships with content providers and has seen modest success with video through its iTunes store.
The computer maker Monday saw its market cap go through the $300 billion ceiling, and is estimated to have some $51 billion in cash waiting for just the right acquisition.
Where the iTunes store is hindered by limited device access, Netflix is available on an astounding 200 different devices, a number that keeps increasing. Even Apple, in its latest iteration of Apple TV, added a Netflix app.
Netflix, convinced by its late-year foray into Canada that it has the ponies to be an international brand, would benefit greatly from Apple's worldwide appeal. It's a deal made in heaven.