At CONNECTIONS™, we often have to address questions regarding the direction of different digital living markets, the trends, opportunities, and potential pitfalls. Parks Associates research, conducted throughout the year and surveying tens of thousands of consumers, forms the foundation for these discussions. Our analysts combine their industry and consumer knowledge with our speakers’ market experience to provide attendees with a comprehensive understanding of the new opportunities.
Digital entertainment is one area that will get plenty of attention at CONNECTIONS™ in 2009. The past two years have witnessed tremendous growth in online video viewing, particularly for premium content such as television shows. In a 2008 study, Parks Associates found that more than 26 million U.S. adults with home broadband access watch TV shows on the Internet through services such as Hulu, Joost, Veoh Networks, or network portals.
So, CONNECTIONS™ will tackle the key question – will consumers begin to see their pay TV services as expendable, since so much television content is available online free of charge (and with many fewer advertisements)? Today, the number of “cable cutters” is negligible. TV 2.0: The Consumer Perspective found that 0.6% of U.S. broadband households don't pay for TV service but are watching or downloading TV shows over the Internet. That would be around 400,000 households.
Despite the popularity of Internet video, cable VoD services retain a tremendous advantage in terms of quality-of-service and the quantity of high-definition offerings. In sizing the potential market for both broadband video and pay-TV VoD services for the next five years, we see significant revenues coming to the operators for these transactional services.
These calculations do not take into account revenues from ad-supported free VoD content, though. To succeed in the free VoD space, operators will have to fine-tune their content management systems and advertising relationships in order to capitalize on nonlinear advertising revenues. Cable operators will likely follow a model similar to the Comcast Fancast development by providing a broadband VoD service that can spur advertising sales and ties back to the existing digital cable service through applications such as remote DVR programming and personal online content features. Cable operators that can develop seamless user experiences between the broadband and cable TV worlds will have an edge on their competition.
Finally, Parks Associates’ data indicate that even among active Internet video users, their likelihood of cancelling pay TV services is no higher than for all respondents. Access to live news, sports, and other exclusive programming, as well as more content in on-demand and high-definition formats, will continue to attract consumers to pay TV services. Parks Associates will track these trends throughout the year, both U.S. and worldwide, and CONNECTIONS™ sessions will feature the latest data and expert analysis on these figures and how they might change over time.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment