According to The Diffusion Group (TDG), the number of households that will be using over-the-top (OTT) video services will grow from 106 million in 2010 to 250 million in 2016. While impressive, this is but 51 per cent of the households that will be capable of receiving OTT TV services in 2016. In other words, 488 million households will have the hardware and broadband services in place to receive OTT video services, but only a portion will actively take advantage of these connections.
It is this gap between OTT-capable and OTT-active households on which TDG has concentrated its energy. Unfortunately, industry conversation has been derailed by a premature focus on so-called “cord cutting,” when in reality the opportunity/threat lies in chipping away at Pay TV’s premium offerings like HBO. According to TDG Senior Partner Colin Dixon, this is precisely where net-connected TV platforms are having the most impact, pushing over-the-top video services like Netflix into mainstream living rooms.
“In 2009, net-based TV video services were few and far between. Today, when a consumer connects a ‘smart’ TV, a Blu-ray player, or any other video platform to the Internet, they will find a wealth of TV-optimised content and applications at their disposal.”