2. “Session 1: 2015 OTT Industry Scan- Assessment of Latest Deals, Strategies, and New OTT Services”
Brian Mahony
CEO and Principal Analyst, Trender Research,
Founder, OTT Executive Summit & Magazine, *

3. Background Following the IPTV & OTT markets for 10 years
Manage a 25,000 OTT community including:
Trender Research
OTT Video LinkedIn group
OTT Executive Magazine, web, , social
OTT consulting clients including:
OTT set-top box
Pure-play OTT content network
Leading OTT integrator
OTT network video service provider
Various investors: VCs, Wall Street, angels
© 2015 TRENDER Research, Inc.
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4. OTT Background Data
The number of OTT subscribers is likely to increase globally from 92.1 million in 2014 to million by Juniper Research
Video traffic over smart-phones will increase 800%- Juniper Research
© 2015 TRENDER Research, Inc.
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5. OTT Video Viewing Is Exploding
The number of OTT subscribers is likely to increase globally from 92.1 million in 2014 to million by Juniper Research
Video traffic over smart-phones will increase 800%- Juniper Research

6. Netflix Has a Chance To Become the Top “Channel” This Year

7. Linear Pay TV Services Beginning to Crumble
In Q1, Pay TV providers saw first-ever Q1 subscriber losses (2013 was the first year of yearly losses)
New and upcoming devices/services are hammering away:
Sony PlayStation Vue
Dish’s Sling TV
Upcoming services from Apple and Verizon
SVoD services from Netflix, Amazon, Hulu continue to grow
Google’s YouTube is always lurking as a threat
FreeCast’s $10 per year Rabbit TV has 4M subs and plans to add 5M Select TV subs (combines OTA/OTT)
© 2015 TRENDER Research, Inc.
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8. Linear Pay TV Services Beginning to Crumble
The subscription bundle is no longer sacred, with game theory strategies driving mutinies by HBO, CBS, Viacom, Showtime, etc.
Consumers are happily paying an inverse amount for the value/time they spend on OTT services versus Pay TV
“OTT video accounts for a disproportionate amount of content consumed when compared to expenditure — over one-third of video consumed per week is OTT, but it is only 9% of the household video budget. In terms of hours of consumption per dollar spent, consumers have every reason to shift spending to online video.” – Brett Sappington, director of research at Parks Associates
© 2015 TRENDER Research, Inc.
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9. Pay TV Death Knells Pay TV’s audiences are dropping by double digits
Bernstein Research
Some Pay TV segments are in full retreat– kids shows down 20%+
In Q3, for example, traditional TV viewing was down 13 minutes per day while SVOD viewership was up about 12 minutes per day.
Video Advertising Bureau estimates 30%-40% of pay TV ratings decreases can be attributed to SVoD services
Estimates range from about 40% (Nielsen) to 60% (Parks Associates) of US homes accessing SVoD services now.
© 2015 TRENDER Research, Inc.
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10. However, Broadband Continues to Grow in Q1
Pay TV providers added 1.2m broadband subs in Q1 (about 3M adds in past year, + 15% from prior year, 88.5 million total)
But only 10K TV Subs
Cable accounted for 90% of the broadband additions
Telcos Verizon and AT&T together added 573,000 broadband subs, and lost 463,000 DSL Internet subscribers.
Comcast increased the most broadband subs during Q1, with 407,000 additions; it lost 8,000 TV subs during that period.
Time Warner Cable had 328,000 broadband additions and added 33,000 video subs; Charter added 136,000 broadband subs, and lost 5,000 video subs.
* Leichtman Research Group (LRG) looking at the top 17 cable and telco broadband providers in the U.S.
© 2015 TRENDER Research, Inc.
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11. Cable/Telco Pay TV Response Strategies
Verizon offering “skinny bundle” channel packs (FiOS Custom TV) to address the (perceived?) high cost of Pay TV subscriptions
Can’t beat ‘em, join ‘em by offering own or partner OTT services
Cablevision CEO James Dolan, speaking at INTX: “Every dollar of profit I make in video I make $7 in profit in broadband.”
Cablevision offering Hulu and HBO Now
AT&T offering Hulu; promoting Amazon prime
DirecTV does not have this option
Wireless broadband is the OTT wild card
4G LTE
“Public WiFi” (e.g. CableWifi)
© 2015 TRENDER Research, Inc.
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12. Pay TV Can Leverage Core Strengths
Integrated billing
Content aggregation (after consumers add up their new OTT services)
Follow-me TV (home TV, tablet/mobile, browser)
Packaging other services (e.g. home security, home networks, home IT support, e-commerce)
Big data personalization, search and discovery
Customer installation/support?
© 2015 TRENDER Research, Inc.
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13. M&A Chaos: Deals, Deals Everywhere
Comcast buying Time Warner Cable
Charter merging/buying Time Warner Cable and Bright House
Verizon buying AOL
AT&T buying DirecTV
Altice buying Suddenlink
© 2015 TRENDER Research, Inc.
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14. Implications for Content Providers
Hedging bets with hybrid Pay TV/OTT bundles/shows
A&E “Food Porn” and “Fall Into Me”
Hulu as Pay TV/OTT content aggregator (e.g. “The Mindy Project”)
Experimenting with business models
Live streaming, ad-supported, SVoD, Freemium, live PPV, VoD, combination
The launch of Vessel online video platform
No longer have to “ask for permission”- floodgates are open!
But, advertising brands can now go “direct to consumer” with their own channels (e.g. Red Bull) and apps (e.g. on Roku)
© 2015 TRENDER Research, Inc.
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15. What Will Happen?
Pay TV Bundle is now officially fragmented, if not dying
Broadband demand will grow insatiably
Driven by OTT
Driven by Cable and Telcos themselves
Driven by mellenials
Premium content will become even more of a trump card
Content discovery methods/portals still missing
Social media as recommendation engine
Content/service aggregators
Continued business model specialization across content, broadband, and bundled services (voice, video, broadband, even value-added services- home IT, home security, etc.)
© 2015 TRENDER Research, Inc.
All Rights Reserved.