30%+ of pay-TV subs will be ‘TV Everywhere’ by 2016

According to TDG’s latest analysis, by 2016 more than 30 million households will use operator-provided ‘TV Everywhere’ (TVE)  services to access programmes on their 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 US households. That’s the reality that Pay-tv operators are facing.”

In regards to TVE market dynamics, a few major content providers will choose to go it alone and sell direct-to-consumer (that is, without operator sanction), while some operators will attempt to extend existing carriage agreements to cover net-connected devices (that is, without content provider sanction). In most cases, the middle road will be most fertile, meaning 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. In other words, if a consumer does not subscribe to the content through a Pay-tv operator, TVE access will not permitted.

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 multi-screen, multi-source 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.
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