Driven by the uptake of Hybrid STBs and over-the-top (OTT) video, nearly three-quarters (72%) of pay-TV VOD requests will be free transactions by the end of 2011, according to a new report from IMS Research.The “On-demand Services Business Models: Video, Games & Over-the-Top – 2011 edition” report shows that on-demand services from pay-TV operators are becoming more robust each year and are set to generate $48 million for pay-TV operators this year. IMS Research forecasts that by 2016, OTT services delivered via pay-TV set-tops will generate $436 million in worldwide operator revenues.
IMS notes that common strategies of pay-TV operators include offering free on-demand content to subscribers of certain digital bundles and offering catch-up TV services via set-tops or online, and over the next couple of years, integrating OTT services into the set-top box for seamless multimedia delivery to subscribers. In addition, it says that direct-to-home (DTH) service providers are deploying IP-enabled hybrid set-top boxes to allow for more on-demand content delivery.
IMS Research calculates that in 2010, 37 million IP-enabled hybrid STBs shipped worldwide, with 42% of these being satellite boxes, allowing such operators to stay competitive with cable TV and IP networks, which the analyst regards as better suited for two-way interactive services such as VOD. Furthermore IMS Research forecasts that the cable TV segment will account for the majority of on-demand service revenues over the next five years, although its share will decrease from an estimated 66% in 2010 to a forecast 53% in 2016, mainly due on-demand service uptake on the satellite TV platform.
Commenting on the findings, report author, Anna Hunt, said: “OTT services are becoming one of the biggest threats to traditional pay-TV operators, and with devices such as smartphones and tablets proliferating the marketplace, consumers are quickly becoming accustomed to on-demand multimedia consumption. Offering a variety of on-demand services is now essential for digital TV operators that want to retain market leadership status.”
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