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On-demand services threaten traditional pay-TV, says researcher

Posted: 03 Mar 2011 ?? ?Print Version ?Bookmark and Share

Keywords:TV? STBs? OTT services? on-demand multimedia?

IMS Research has released a report on the integration of over-the-top (OTT) services with on-demand services from pay-TV operators. The report says that OTT services from pay-TV operators are becoming more robust. The market analyst expects that in 2011, 72 percent of VOD requests via pay-TV platforms will be free transactions. OTT content delivered via STBs will account for a fair share of free transactions, as well as generating a forecast of $48 million for pay-TV operators this year.

Anna Hunt, study author, IMS Research, notes that "OTT services are becoming one of the biggest threats to traditional pay-TV operators, and with devices such as smartphones and tablets proliferating the marketplace, consumers are quickly becoming accustomed to on-demand multimedia consumption. Offering a variety of on-demand services is now essential for digital TV operators that want to retain market leadership status."

Strategies of pay-TV operators include offering free on-demand content to subscribers of certain digital bundles and offering catch-up TV services via STBs or online, and over the next couple of years, integrating OTT services into the STB for seamless multimedia delivery to subscribers. IMS Research forecasts that in 2016, OTT services delivered via pay-TV set-tops will generate $436 million in worldwide operator revenues.

Also, direct-to-home service providers are deploying IP-enabled hybrid STBs to allow for more on-demand content delivery. Hunt adds, "In 2010, we estimate that 37 million IP-enabled hybrid STBs shipped worldwide, with 42 percent of these being satellite boxes. This equipment is allowing satellite TV operators to stay competitive with cable TV and IP networks, which are better suited for 2-way interactive services such as VOD." IMS Research forecasts that the cable TV segment will account for the majority of on-demand service revenues over the next five years, although its share will decrease from an estimated 66 percent in 2010 to a forecast of 53 percent in 2016, mainly due on-demand service uptake on the satellite TV platform.

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