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Ovum: OTT has entered a “new era”

TV Connect, London

TV Connect, London

Leading analyst firm Ovum argues that direct-to-consumer initiatives such as HBO Now and Sling TV herald a “new era” in online streaming.

While free, ad-supported, and bundled multiscreen streaming has driven huge usage volumes up to the present time, watching the latest Hollywood movies and TV shows has largely been the preserve of downloads, discs, and pay-TV.

This, says Ovum, is changing fast…

“What we’re seeing in maturing markets such as the US is that the audience is shifting towards premium linear streaming, which is augmenting well-established free on-demand services such as YouTube,” comments Tony Gunnarsson, a senior analyst in Ovum’s TV Practice. “Home entertainment is evolving as subscription-based VOD services reach the mass market: It is now commonplace to watch original productions such as Bosch from Amazon’s Prime Instant Video streamed to the main TV. The emergence of stand-alone – often linear – streaming propositions such as PlayStation Vue and Yaveo represent the first that truly substitute for traditional pay TV.”

Ovum expects that these changes will cause an already unforgiving competitive environment to intensify. Services which fail to understand the increasingly complex array of choices available to the audience will struggle against those that address the need for connectivity, perhaps in hardware as well as content, while there is likely to be much downward pricing pressure as the multiplay offers will ruthlessly discount bundled services which lie outside the core business of the seller.

“We are on the cusp of the next major evolutionary growth phase in visual entertainment,” adds Ed Barton, Ovum’s Head of TV Research and Analysis. “As the industry hunts for opportunities to address slowing traditional TV subscription revenues, the major trends in technology, audience consumption, and service evolution offer glimpses of a brighter future. We see a shift in how TV is increasingly addressing individuals rather than households, and how the merging of online and broadcast advertising technologies and the ongoing hunger for true ‘Martini TV’ – any time, any place, anywhere – from the audience offers significant incremental revenue opportunities. The proliferation of linear SVOD from traditional TV is just one part of this shift which underpins our firmly held view: TV’s best days lie ahead.”

Tony Gunnarsson and Ed Barton are both chairing at this year’s TV Connect (28 – 30 April 2015 ExCel, London). Click here for booking and more info about the world’s leading connected entertainment event.

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