Parks Associates: Online video pushing strategic shift among service providers

APRIL 20, 2010 -- The popularity of online video consumption is forcing service providers to reposition as media companies with new offerings, such as TV Everywhere, according to Parks Associates’ Online Video and Broadband Provider Strategies.

The international research firm reports that the number of U.S. broadband households watching premium online content doubled in the past year. More than 25 million U.S. broadband households regularly watch full-length TV shows online, and more than 20 million watch movies online.

“Connected CE devices are affecting the competitive ecosystem of the television industry, and while the current number of cord cutters isn’t substantial, service providers are concerned about these developments,” says Jayant Dasari, research analyst, Parks Associates. “Pay-TV providers are working to head off a possible shift that might devalue their services by offering TV Everywhere. These services supplement their traditional offerings, which might not dissuade anyone determined to cut the cord, but providers could use them as models for future business strategies.”

Online Video and Service Provider Strategies reports that consumers have yet to establish strong preferences on whether they get video and other value-added services from broadband service providers or over-the-top providers such as Hulu. Service providers can leverage this consumer neutrality and reposition themselves as media companies.

Comcast has been leading the TV Everywhere charge with its XFinity service, reports Parks Associates. Comcast customers subscribing to both broadband and pay TV have access to a wide selection of programs online. This type of service enables programmers and pay-TV providers to sustain their current business models while setting the stage for future revenue opportunities.