Trends This Week
Here are the major takeaways from this week’s The Online Reporter.
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Cord-Never Population Is Still Small
Despite the media frenzy last week over cord-nevers – young adults who opt for on-demand OTT services over pay TV subscriptions the group accounts for a very small slice of the demographic, at present. According to a survey of 2,500 US consumers conducted by Altman Vilandrie & Co, less than five percent of respondents under 35 years of age watch online video regularly instead of subscribing to pay TV, and half of non-pay TV subscribers said they plan to get a subscription in the next five years, indicating that these young adults will mature into pay TV subs once they form households. Viewers across age demographics are changing their viewing behaviors, however. On-demand viewing, online viewing and particularly tablet viewing is on the rise across all age groups in the study.
Catch-Up and On-Demand OTT Services Flourishing Around the World
On-demand and catch-up services on the Internet are booming across the globe. BBC’s iPlayer had another stand-out month; on-demand TV show requests in September were up over last year. On-demand content now makes up 88% of iPlayer TV requests, while live TV viewing on iPlayer dropped 62% over last year. Another pay TV provider has decided to offer Netflix on its TiVo STBs, and four telcos in Europe announced new on-demand OTT services. The survey of 2,500 consumers in the US, released by Altman Vilandrie & Co last week, found that 80% of respondents under the age of 35 and 50% of respondents over the age of 35 watch TV online at least once a week. Sky Deutschland is launching its own OTT service ahead of a possible Netflix launch in the country, as are two OTT services in France.
Would-Be Cable Killers Are Having a Hard Time
Intel’s stumble last week illustrates why Apple, Sony, Google or Amazon will have a hard time offering so-called “cable-killing” national broadband-delivered services that combines linear TV and OTT services. The dynamics of the industry don’t favor new entrants: content is expensive, the bundle is entrenched, and none of the hardware-based companies own broadband networks. While Apple, Google, Sony and Amazon could still upset the current pay TV ecosystem, it won’t be by offering broadband-delivered linear pay TV. It currently looks like only established pay TV providers with large subscriber bases and stable relationships with content owners and their own broadband networks will be able to successfully offer such a service.
Consumers Are Dictating the Brand of Tablets that Corporates Choose
The brand of tablets that consumers buy for themselves is the main driver in the corporate market as shown by Apple’s iPad being number one in that market followed by Amazon, which had moved into second even before it launched three corporate-friendly Kindle Fires, and is tied with Samsung. Amazon chief Jeff Bezos has made clear that Amazon intends to be successful in the corporate market and is developing features and functions that corporates want. Many corporates have adopted a BYOD strategy to accommodate their employees’ preference in tablets. It must be a disturbing trend for Microsoft to see because its pricey Surface Pro tablets have, so far, failed to penetrate the corporate market in large quantities. Unless Microsoft and its PC makers move quickly to rectify the situation, they could find themselves left out. Dell took a step towards accomplishing that last week by launching a $299 Windows Pro tablet.
A 55-inch Smart TV in Every Room
Prices of 55-inch smart TVs have dropped to the level of high-end tablets as shown by Walmart pricing a Hisense smart TV below $700. If every person soon has a tablet, as some have predicted, it may well be that every room will soon have a big smart TV. The low prices also show how far 4K sets will have to drop in price to become mass market.
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