The mood on the opening day of this week's Over-the-Top TV & Video Conference in San Jose was, well, exuberant. The vendors scattered in the display area at the conference center were all exuberantly showing their wares to equally exuberant attendees. Exuberant presenters drew a lot of laughter (best line of the day was from Boxee marketing VP Andrew Kippen who, when asked how the OTT media-center software company made money, replied straight-faced, "Currently we don't... we keep asking venture capitalists for money and they keep giving it to us."), and even late afternoon sessions, like "Cable/IPTV and OTT - Friends of Foes?" elicited, um, exuberant debate.
The first-year conference, hosted by X Media Research, shows just how much the market has matured in the past year, which presenter Jon Cody, SVP at Fox Digital Media noted when he looked out at the SRO conference room during his keynote.
"The Diffusion Group says 100 million households will have Internet-connected TVs by the end of 2011, and bridge devices like gaming consoles, Roku, Vudo and Blu-ray are making it easier to get the Internet to your TV," he said. "How many consumers are going to cut the cord and drop their cable or telco connection? If only 20 percent of a top cable player's customers cut the cord, that cable company loses $1 billion in revenue."
There's a lot of confidence from OTT players that they'll be pushing online video and online content increasingly into consumers' living rooms.
Boxee's Kippen says his company has been "talking to everybody" in CE manufacturing about getting its software onto their products. "Right now, one in 10 Internet users connect to a TV," he said. "To get the other 9, it may have to be on hardware."
Boxee said that it plans to deliver an "under $200 box" to the marketplace this year, and said the company, which currently has 1 million users, is shooting for 3 million users by year's end.
"No one really wants to buy a box," said Roku's VP of business development Jim Funk. "They want to buy an experience; there's something that people just aren't getting from TV and cable, so they're going to OTT. But we have to be careful. To get beyond the early adopters, we have to make sure that we make it simple."
Access is coming. Whether it's through a Boxee, Roku or via something yet to debut, OTT is gaining momentum with consumers who now are beginning to expect options beyond cable and telco services. They're looking for a way to access the online video they're used to seeing on their PCs.
But is it an either/or proposition? Will an OTT experience lead to cutting the cord?
"It's not just about cord cutting," said Michael Greeson, founding partner at TDG Research. "There are consumers who will replace Pay TV with OTT, and there are ‘supplementors' who will add OTT to supplement their Pay-TV service. We think they're likely to provide more opportunity and to be a bigger market."
Greeson says OTT revenue by 2014 should be in the neighborhood of $5.8 billion. And that's a pretty good neighborhood to be in, just ask the folks at OTTCon. But be careful, their exuberance is contagious.-Jim