Report: Internet & Mobile Technologies Will Change the Pay-TV Industry

written by: Richard Kastelein

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Internet technologies have been a catalyst to turn TV into a mash-up of many kinds of content and then bring it to any screen, while TV viewing has become more fragmented. These developments have left operators and advertisers scrambling to assess the implications of Internet TV on the pay-TV ecosystem, according to a new report from Pyramid Research:

"TV is the next platform for mass application development, similar to the App Store model of Apple's iPhone and iPad, and it will have an impact both on Internet TV and pay-TV. Google has already announced an Android Market for its Google TV offering. TV-centric application development tools are now being made available to the general public, and some operators are encouraging external developers to create applications that could run on their systems by funding contests that pay revenue splits and, in some cases, cash awards to winning developers."

TV Anywhere: How the Internet & Mobile Technologies Will Change the Pay-TV Industry is an up-to-the-moment analysis of the swiftly changing Internet TV environment, focusing on a variety of conventional, hybrid, and new technologies that are creating new business models. This 71-page report analyzes the current state of Internet TV worldwide, including available service models, consumer-facing services, and their available underlying enabling technologies. It also provides an assessment of the value of different implementations of Internet TV based on different levels of operator investment.

The enabling technologies behind pay-TV and the Internet have been moving targets, but finally an increasing range of Internet-capable consumer devices is enabling consumers to access these content and communications services anytime, anywhere, and over increasingly fast fixed-line and wireless access networks. Content comes not only from the media companies, but increasingly from independent sources, as well as from other consumers via social networks.

"While content owners can bypass pay-TV operators by going direct to consumers over the Internet, the operators' role as aggregator, along with their potential to present a single common user interface to the consumer over any device, presents a counterargument of convenience," says Steven Hawley, Analyst at Large for Pyramid, and author of the report. "Some pay-TV operators have more power than others because their corporate parents also may have holdings that produce content and provide enabling technologies, while others say that the world turns on advertising, which pays the freight for commercial television." IPTV, as a set of technologies, represents both a threat and an opportunity for all facilities-based pay-TV operators. "The services that we currently call pay-TV and Internet TV will grow to resemble one another more, while viable new business models are emerging for operators that embrace IP," Mr. Hawley says. "But despite growing similarity, some differences between pay-TV and Internet TV will remain." "The most successful pay-TV service providers and network operators will be those that deliver the broadest range of paid, sponsored, free, and user-generated content to consumers over as many network and device platforms as possible," Hawley adds.

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