Internet Protocol TV Market
Though numbers vary, research typically shows an increase in demand for over-the-top content (OTT), as well as an increase in cord cutting trends.
ABI Research estimates that by 2017 OTT revenue will quadruple to $32 billion, up from $8.2 billion in 2012, and with increased focus on experience through multiple devices. ABI Research says, “Connected consumer electronics and mobile/portable devices in particular present additional consumer touch points and enable more creative ways to connect or interact with consumers. These devices are capturing more of our attention as many consumers claim to multitask while watching TV. Finding new ways to better engage consumers through OTT experiences, therefore, will prove increasingly important as consumers adopt new viewing behaviors.”
As for cord cutting, the Convergence Consulting Group Ltd estimates that 2.65 million cable subscribers ditched their services between 2008 and 2011, with about 1.5 million of those happening in 2011. Nielson Media Research reports a 22.8 percent increase in cord-cutters from 2011 to 2012, and estimates that 4.5 percent of television-owning homes are picking streaming over cable.
In August 2012, DirecTV Group reported a quarterly customer loss for the first time, with 52,000 homes dropping the service in Q2, 2012. According to Yinka Adegoke at Reuters, “That was more than analysts expected from a company long seen as the best run video provider in the industry.” Also in Q2, Time Warner Cable Inc. reported losses, with 169,000 customers leaving the service, marking the 10th straight quarter of customer losses.
Some criticize the focus of these reports, however, pointing out that these studies tend to look at television-owning households and people who have cancelled their cable services while ignoring the “cord nevers,” or people who have never subscribed to cable services. According to Rebecca Greenfield of, “The cord-cutting numbers don't count people who have never subscribed to cable, as the stats usually look at people who are canceling subscriptions. People who never bought cable — say, young people living on their own for the first time —won't show up. The anecdotes are out there, but we don't know how much statistical damage these people have done.”
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