A Third of Pay-TV Subs to Use TV Everywhere by 2016

FRISCO, TEXAS - To defend against the encroachment of over-the-top (OTT) broadband video services such as Netflix and Hulu Plus, pay-TV operators are launching TV Everywhere or 'TVE' services that allow subscribers to access TV channels on other Web-connected devices.

According to forecasts by industry analyst TDG, by 2016 more than 30 million households will use operator-provided TVE services to access video programs on net-connected devices.

"The logic is straightforward," notes Colin Dixon, TDG senior partner and author of the new report. "If consumers can access their pay-TV services on their PCs, pads, and mobile phones, they should be less likely to use competitive services like Netflix or Hulu and thus less likely to cut the cord."

Will this strategy work? Perhaps, argues Dixon. "Though having 30 million households actively using TVE services by 2016 is not insignificant, by that same time OTT video services will be used by nearly 90 million U.S. households. That's the reality that pay-TV operators are facing."

Content Provider TVE Vs. Operator TVE
Dixon expects a few major content providers to sell direct-to-consumer (that is, without operator sanction) and also expects that some operators will extend existing carriage agreements to cover net-connected devices (that is, without content provider sanction).

In most cases, however, collaboration will prove useful for both parties. Content providers may be able to frame the end-user experience, but operators will provide a branded, authenticated "gateway" through which consumers access the content. For these reasons, Dixon expects that operator or "Op-TVE" services will dominate this market space. Though content provider or "Con-TVE" services will play a role in the early market, they will quickly be absorbed by Op-TVE services.

According to Dixon, this multiscreen, multisource paradigm will gain traction over the next few years, due primarily to a shift in viewing models from a "content-centric model - where the viewer seeks to find the content - to a viewer-centric model - where the content seeks to find the viewer." In this quantum video universe, multiple sources appear on the TV screen, and on-demand availability matters more than the source of content.