#2 – CSPs enjoy one last hurrah before online media providers take the lead
Summary: Thanks to easy accessibility through Internet-enabled devices and a more complete selection of online content, consumers are moving away from media consumption via their TVs. Therefore, their choice of media provider will be less based on product packaging, like triple play, from communication service providers, and increasingly more on providers that give the best quality access at the best possible price.
Traditional TV viewing as we know it is changing rapidly. A flood of smartphones, tablets and Internet-enabled TV sets connected directly to TV and VoD services without set top boxes are now enabling consumers to freely choose media provider beyond traditional cable and IPTV providers. Consumer spend on media will continue to rise, but the revenue for communication service providers will peak in 2014 and thereafter follow other online media providers.
Increased smartphone penetration along with high capacity fixed and mobile broadband is making the Internet, phone and TV triple play packaging obsolete. Internet access, phone calls and media consumption are now made from devices that only need a broadband connection to communicate with the world.
With the emerge of platform independent, pure online media providers such as Netflix, Hulu, Lovefilm, HBO along with TV channels own “play” initiatives, the consumer is in a position to chose what content to consume and when. This decouples the content being delivered from the communication service provider.
Northstream believes that during 2014, consumers in primarily North American and Western European markets will increasingly seek to find less costly and more versatile alternatives to current cable, satellite and IPTV providers. Media consumption spend will move from the communication service provider to a wider range of online media providers where consumers have a choice between different providers rather than being tied to a fixed set of pre-defined content packages. To keep their market share, operators and broadcasters will be forced to consider and collaborate with alternative providers to secure attractive content and multi-screen propositions.
The main prerequisite for the consumer will be the access to fixed and mobile broadband to be able to consume the online content, which means the demand for stable and reliable connections will be key.