A new report from IPG Mediabrands’ IPG Media Lab and Magna Global says a major problem is diverse services that don’t work together: “The landscape is cluttered with different, incompatible ecosystems that are difficult to understand.” In addition, the report is concerned about limited flexibility for OTT services, given the legacy deals between traditional TV content providers and TV distributors -- especially when it comes to offering channel-by-channel deals in “a la carte” offerings.
Two other problems: Behaviorally, many media consumers -- while experimenting with digital
media -- are still stuck on “linear” television consumption. IPG Media Lab says “baby boomers” in particular seem to want to hang on to the ways of the past.
The report also says high-speed communication technology isn’t consistent and/or widespread, especially in rural areas.
Still, IPG’s sister division, MagnaGlobal, is estimating that
traditional pay TV consumers -- those coming from cable, satellite, or telco -- will peak at 106.4 million consumers this year and then slide in the coming years, down to 104.7 by 2018.
At the same time, MagnaGlobal expects the 2014 footprint for OTT devices in the U.S. to be 47 million -- double that of 2013. U.S. smart TVs are expected to grow quickly -- almost double to 78 million by 2018 from 45 million today.
Future TV transformation will help OTT, as TV networks may evolve into other platforms.
For example, IPG believes that “TV networks such as Bravo or
the Food Network may morph into subscription-based or ad-supported apps, with commerce opportunities to drive revenue, eliminating the need for the linear channel altogether.”
Cable operators may become closer to “app aggregators.” It also sees more direct-to-consumer content -- eliminating the need for “middleman” activities.