Pay-TV carriers and content
owners are responding to the consumer trends, as they prepare for the
challenges posed by the new market environment. They are actively supporting and developing
services for watching video on tablets and smartphones and boosting internet
speeds to support online distribution.
Content creators are essentially indifferent to
carrier dynamics, so long as they get paid well. For now the cable/satellite/telco
service providers offer a lucrative monetization model. The
disruption of this model by online platforms is an obvious concern; consumers are
not accustomed to paying as high a premium for content on the net.
The market will remain in a state of flux, as new developments
transform the industry. Opportunities of online video distribution have
attracted a host of technology companies. Google, Netflix, Hulu, Vevo, Amazon, Microsoft, Apple and Yahoo present both an opportunity and a
threat for traditional producers of TV content. Some of these companies are
owned and operated by big networks, studios, and music corporations. Hulu for
instance is owned by NBC, Fox, Disney–ABC, and Vevo is run by a joint venture
comprising Universal Music Group, Google, Sony Music Entertainment and Abu
Dhabi Media.
Vevo, in March 2013, launched Vevo TV, an
advertising-supported internet television channel running 24 hours a day,
featuring blocks of music videos and specials.
Meanwhile, in April 2014, Amazon added multiple scripted
and animated shows to its subscription-based Prime service
and released the Fire TV box meant to stream the content directly on to
televisions.
We are witnessing the
confluence of a number of forces that, taken together, will further accelerate
the growth in online media consumption. Consumers’ viewing preferences and
habits continue to steadily shift to online devices. Supply and distribution is
better aligned with their tastes and preferences. And advancements in
technology provide for superior consumer experiences.
Improvements in streaming technology and faster
broadband links have dramatically reduced the time it takes for content to
load. Developments in these fields also permit content providers and
advertisers to engage with viewers in a number of different ways.
While many of the market developments in the earlier years
had been U.S.-centric, by 2014 the momentum had moved to Europe and rest of the
world. Netflix, for instance, which started its international operations in
Canada in 2010, was offering its service to over 40 countries by 2014, and 190 by 2021.