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Next Generation TV Operators Reconsolidation Is A-Coming

Report by Tim Mulligan
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Next Generation TV Operators: Reconsolidation Is A-Coming

20,000 Foot View: Nearly a decade has passed since Netflix launched its subscription video service in 2007, and the intervening nine years have seen an explosion in competing offerings. The result is a disjointed premium video experience for the digital consumer, with content fragmented across multiple siloed competing services. Just as the television set led to the establishment of hardware-specific cable, satellite and fibre pay-TV operators, so the new digital landscape will increasingly turn to one-stop solution providers that are able to aggregate and simplify the online video consumption experience.

Key Findings:

  • The great pay-TV unbundling promise has ended up translating into a disjointed user experience 
  • There are now three broad categories of mobile video apps for TV content: SVOD apps, authenticated channel apps, video apps
  • There were        million US video subscribers in June 2016 compared to        million authenticated app users 
  • Netflix, Amazon and Hulu account for        of all US video subscribers
  • It would cost        a month to subscribe to all of the video services necessary to watch the        most pirated TV shows 
    •        is thus a real danger to premium services because of the siloing of premium content on competing SVOD services
  • Video app fragmentation creates a case for a video aggregation platform that can both resolve the defects in the market and counter the appeal of piracy
  • The most likely candidates to fill this role are the big four technology companies: Google, Amazon Apple, and Facebook (or GAAF)
  • Comparatively low ARPU for SVOD means that only bigger tech partners can bring scalable audiences to make a viable business alternative to pay-TV
  • Not only will the shape of operators change, but the distinction between network and operator will become progressively blurred

Companies Mentioned: Netflix, Amazon, Hulu, Fox Networks, HBO, YouTube, Google, Facebook, Snapchat, Verizon

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