Skytide Blog

For the past few several years, pundits and industry analysts have prophesied the day when time spent by consumers with digital media would surpass time spent watching TV.

It would appear that time has come.

According to findings released by eMarketer, the average adult will spend 5+ hours per day consuming digital media — spurred by online video viewership over mobile devices — versus 4 hours and 31 minutes watching TV.

Since the research counts time spent within each media — regardless of multitasking — it’s still difficult to accurately determine which content consumers are actually viewing in this age of the “second screen” and continuous partial attention. Still, the message is clear. Digital media is ascendant.

iTunes ushered in the era of a la carte content consumption, with many consumers more than happy to purchase a song or two from a new release rather than buy the entire album.

While that model continues to appeal to consumers, it decimated the traditional music business.  That fact certainly isn’t lost on Pay-TV providers and media companies, who have fiercely resisted the notion of unbundling their subscription packages and providing an option to purchase content on a more a la carte basis.

Intel’s premium OTT offering — currently in development — may be on the way to establishing a middle ground.  As currently envisioned, the service would:

• Enable viewers to select which niche blocks of channels — sports, music, movies, etc.. —  that they would like to include in the service.  Consumers could not purchase individual channels yet but… they could eliminate a lot of the channels and programming that they rarely watch.
• Require consumers to pay a premium to purchase a block of themed channels.  This would offer consumers more choice without threatening media company’s lucrative carriage fee revenue.

It will be interesting to see if Intel makes enough headway with this service to actually bring it to fruition.

Sometimes embarrassment can be a powerful motivator for change.

Conversely, so can the stature and prestige that comes from a high ranking.

Looks like both were in play in motivating Cablevision to join the Netflix Open Connect CDN according to this post by FierceCable.  The back history looks something like this:

• Cable operators like Cablevision are not particularly fond of Netflix, since it siphons off potential pay-per-view customers and sucks up a lot of bandwidth.

• Cablevision is not particularly fond of fellow cable provider Verizon either, which it counts as its biggest enemy. 
• In 2011, the FCC released its first Measuring Broadband America report and Cablevision fared poorly; it delivered advertised Internet download speeds just 59% of the time during peak hours, while Verizon delivered more than 100 percent of its advertised speeds.  Not surprisingly, Verizon jumped on this and hammered it home in a series of ad campaigns.
• Then Netflix poured fuel on the flame when it began publishing its ISP Speed Index, which also reported that Verizon FiOS delivered faster speeds than Cablevision. 
• Pushed into a corner, Cablevision chose to join Netflix’s Open Connect CDN in an effort to improve its speeds and its paid off  handsomely. Cablevision now ranks #2 among all cable providers — 3 spots higher than Verizon — and is rolling out consumer marketing that touts the difference.

The learnings from all this?

• The Netflix ISP Speed Index is working like a charm.  

• Video caching can be used for strategic advantage to deliver better QoE and improve perceived performance in the eyes of prospective customers.  It will be interesting to see if other service providers follow suit. 

Two of the most highly regarded prognosticators of all things Internet-related both weighed in yesterday. The executive summary — all signs continue to bode exceedingly well for online video.

• Cisco published its Visual Networking Index and the numbers are jaw dropping. Consider these predictions for 2017:
  • Online video will represent 69% of consumer internet traffic.
  • Mobile video is really poised to explode, fueled by the seemingly insatiable global consumer appetite for connected devices like smartphones and tablets. Cisco forecasts that mobile video will account for 66% of all mobile data traffic. For perspective, that would be a 16 fold increase from 2012.
  • Internet content streamed to TVs will hit a mind boggling 6.5 exabytes per month. 6.5 exabytes per month!

If these numbers actually pan out, it will require massive infrastructure investments and turn up the heat on network service providers to establish new revenue streams to offset these expenditures.

• Analyst, Mary Meeker also published her oft quoted State of the Web presentation.
  • Particularly interesting to us was her mention of the rise of short-form video, driven by the likes of Vine and Dropcam. Just check out Vine’s surge in active users since the beginning of the year. It will probably surpass your expectations; it definitely exceeded ours.
  • Even so, Skytide is still predicting that the market will also see a surge in long-form video too, as more movies and TV programming are delivered over IP. Check out our 6 Online Video Trends for 2013 report for more insight on the subject.