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The video and TV market is changing, but not as fast as many people are suggesting, according to analyst firm Strategy Analytics.
In its report, Subscription Video and TV Forecast – North America, Strategy Analytics predicts that:
“It’s not about subscribers, it’s about revenues,” says Michael Goodman, Director, TV & Media Strategies. “Focusing on Netflix subscriber numbers, impressive as they are, ignores the fact that pay TV ARPUs are still more than 10 times higher.”
The report analysed the convergence of traditional pay-TV services offered by firms such as Comcast and AT&T with newer subscription video services from Netflix and Amazon Prime Video, as well as Internet-based pay-TV services such as DirecTV Now, Sling TV, YouTube TV, Hulu Live, and PlayStation Vue.
According to Strategy Analytics, consumer decision-making and behaviour are changing as a result of this evolving marketplace. Accordingly, the firm suggests that there are further questions which both traditional pay-TV providers and emerging online video players should consider, including:
The report suggests that video providers will improve their chances of succeeding in this complex new environment if they focus on identifying consumer needs and desired experiences, evaluate their existing products and service offers, and monitor their market performance.
“There is a long way to go before the winners can be announced,” says David Mercer, VP and Principal Analyst. “The long-term transition to IP-delivered video will allow many players to benefit, but understanding consumer needs and how to meet them will be critical to any successful strategy,” he advised.