For people attending The Internet and Television Exchange, the redubbed Cable Show for 2015, enabling technologies are as important as always, but the transformation of business models in the video delivery industry has certainly cast a huge grip on an industry caught in the middle of a seismic change — driven by ever-increasing broadband speeds, mobile access to content, and yes, disruptive Over-The-Top (OTT) offerings.
TV delivery, or video content delivery to be more accurate, is changing dramatically. It’s a business model shift, and it’s changing in reaction to an altered audience landscape where viewers demand the content they want to watch anytime, anywhere, and on any device — and their choice is precipitated by OTT video services like NetFlix, Hulu, and Sling TV.
Broadband Internet and smartphones have transformed the way video content is being consumed: it’s moving online. It’s also moving to mobile, especially for younger generations who have grown up with broadband, social media, and smart devices. This phenomenon has forced video content distribution businesses to adapt. We now hear about “skinny bundles” from multichannel video program distributors (MVPDs) — a trimmed down TV channel program bundle that only includes local over-the-air channels and a dozen more of your choice — like the “skinny bundles” offered by Comcast or Verizon FiOS. Consumers may even be able to swap channels after a certain period of time, and it’s all for a fraction of the monthly bill offered today for 500-channel packages.
A week before the show, Cablevision announced its “Cord Cutter” package, a video package based on HDTV antennas that transmits basic TV with local over-the-air channels and OTT content for $39 a month, which can also be bundled with high-speed data for $45 a month. Did you get that? A cord-cutting package from a cable company! It’s built for people who would probably never sign up for a fat cable TV package that can cost upwards of $100 a month.
Recent announcements from some fast-moving cable operators offering OTT content from Hulu and Netflix from their set-top box services or subscription services to OTT is another testament to these business model changes. The skinny bundle, the cord-cutter bundle, or whatever you want to call them, reflects the trend that service providers are adopting to meet consumer demand. Some time ago, some people claimed that à la carte TV programming would never happen. Well, it’s happening.
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