The ability to access full Internet sites, over-the-top (OTT) video services, apps and TV Everywhere from increasingly powerful mobile devices has reduced the incentive for consumers to pay for dedicated carrier-based mobile video services, according to US research firm SNL Kagan.
A recent study found that whilst pay-TV operators have been busily rolling out TV Everywhere apps to stem the threat of cord-cutting, these initiatives have met with a lukewarm consumer response so far.
SNL Kagan adds that OTT apps like Hulu Plus and Netflix are resonating more with consumers than TV Everywhere apps, while free video iPad apps from major content owners such as Disney, Viacom and Time Warner are also doing well.
However, paid video apps are not doing as well as the free offerings, leading many content owners to look to video app advertising to generate revenue.
Overall, many content owners are starting to view mobile as a necessary churn reduction tool to complement existing multichannel subscription services, and less as an opportunity to generate new revenue – a familiar refrain for those in the telecoms industry who embarked on IPTV projects.
2011 saw the shuttering or sale of many of the companies tracked by the report in previous years, although SNL Kagan believes this shakeout to be healthy and a reflection of internal problems at these businesses, rather than softness in demand for mobile video services.
Last year, the companies that focused on providing the technologies that enable mobile video delivery once again reported the strongest revenue growth, according to the report.