Competitive Landscape: Internet TV Service Providers
Published: 28 September 2012
Report Extract – G00228805
Analyst : Fernando Elizalde
Market Players
“Internet video providers can be grouped according to the type of content they provide — broadcast TV versus premium TV and long-feature content. Although at the onset of Internet TV services this distinction was very clear, it has since begun to blur.
We group the market players into the following group players:
- Pure play OTT online providers. These OTT companies started as providers of TV content online — ad-supported or subscription-based — and have remained mainly so. Among these companies are PPTV, PPStream, Youku and Zattoo.
- Broadcasters. National organizations, such as the BBC, Channel 4, NBC, TVE, and SVT Play, that produce, broadcast and otherwise distribute content.
- Content aggregators. Distributors of premium content, such as LOVEFiLM, Netflix, Vudu, Vodder, Hulu, Amazon Instant Video, Maxdome, blinkbox, LeTV, and Mubi.
- Technology vendors turned OTT providers. This type of vendor has developed specific technology solutions positioned for OTT video and provide a platform for pure play, content aggregators and content owners to stream video to the TV screen, examples being Apple TV, Roku and Boxee Box.
Production of Original Content
Netflix and Hulu have started to produce original content, in some cases in co-production with foreign broadcasters. Hulu’s first original series was streamed in January 2011, and it has been followed by three more additional series. Most recently, Hulu and the BBC, the British public broadcaster, announced the co-production of the fourth season of a popular political comedy. Likewise, Netflix first streamed original programming in 2011 and co-produced a TV series with Norwegian broadcaster NRK1. Netflix expects to commit approximately 5% of its content acquisition budget to original programming. As a means to achieve differentiation at a lesser cost than signing exclusive distribution with major studios, this is a strategy that can prove effective for Internet TV service providers with financial strength to execute it”.
TV-Everywhere Emerges as a Valid Counter-Offensive
Against Internet TV
“Pay-TV service providers are starting to implement TV-everywhere strategies, making their content, partially or in full, available over any connected screen in the home, and where licensing agreements and regulatory environment allow it, outside as well. Their content offering is made available on every connected screen through mobile apps for media tablets and smartphones and TV apps for broadband-connected TVs and streaming boxes. This is also followed by premium channels that make their content available to subscribers to pay-TV services on multiple screens (for example, HBO, Disney and Showcase) or even launch stand-alone online services as in the case of HBO in the Nordic countries.
Example Recommendation
Internet TV service providers must differentiate their products based on exclusive content, such as first on-demand release window, innovative features (such as content discovery and recommendation tools), or accessibility on screens and platforms, to effectively compete in the increasingly commoditized market”.
Google TV vs Internet TV
There is much debate in the US whether $7.99 / month for Hulu Plus is good value.
To what extent are demand based or value based pricing the right option for the consumer going forward.
Gartner – “premium content producers and channels, such as HBO and Showtime, don’t generally license their most popular content to video streaming services to maintain a differentiation of their own subscription services”
For me it is not about the delivery method, in an always connected world, it is about which provider has the premium content I want to watch [e.g. Breaking Bad, Treme, House of Lies] at a price point I am prepared to pay.
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