Internet-based pay TV revenues to quadruple by 2020

Internet-based pay TV revenues will quadruple by 2020

Revenues from internet-based pay TV revenues will quadruple by 2020, according to new research by Red Bee Media, as more services launch in a bid to capitalise on consumer viewing habits shifting towards online, on-demand content. Speaking at the Guardian Changing Media Summit in London and presenting findings from the firm’s ‘Tomorrow Calling’ study, Red Bee CEO Bill Patrizio says that online video ads will also grow by 320% during the same period. Traditional TV and media firms are looking to manage the emerging threat from tailored video-on-demand services as online viewing soars, demonstrated by recent comScore stats that claim that 83.8% of all US internet users now watch online video.

Red Bee’s stats come a day after BSkyB announced the launch of its over-the-top (OTT) pay TV service, NowTV, a move that Virgin Media’s  digital entertainment director, Cindy Rose, describes as the firm “cutting its own cord”, in reference to the growing trend of US consumers cancelling their expensive cable subscriptions in favour of online equivalents. Speaking at the same event, Rose labels the decision as “brave”, but adds that it could turn out to be a “smart” move if executed directly. While she says that Virgin is likely to follow suit “soon”, she concedes that it will not be this year.

TV manufacturers are also attempting to keep pace with shifting TV consumption habits, with a raft of internet-connected TV (IPTV) sets hitting the market over the past two years. Reports that Apple is readying its own IPTV for release this year are rife, and Google’s European agency operations MD, Mark Howe, believes that Apple’s next move will determine the course of TV manufacturing across the next decade, with rivals creating similar products in an effort to remain competitive.

Google’s IPTV service, Google TV, has struggled to gain traction since its launch in 2010, attributed to low consumer adoption and US broadcaster boycotts, but the firm is redoubling its efforts with the service with a greater focus on proprietary apps such as YouTube. The Google-owned online video network has made strides in recent months to attract higher ad dollars, producing nearly 100 original channels with a slew of content creators including Demand Media, Reuters and FremantleMedia as it continues in its battle to control consumers’ living rooms. More than half of the respondents to Red Bee’s research believe that YouTube will spend £100m ($158m) on original content in the UK alone by 2020.

 

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