nScreenMedia OTT multiscreen media analysis

Pay TV gets armed by Comcast for OTT battle!

Comcast Wholesale

At NAB 2016, signs were everywhere that a flood of video services is about to hit the Internet. To be competitive, pay TV operators will need to be more flexible and agile. Technology providers, including Comcast (yes, that Comcast) stand ready to help them transition to online pay TV.

One of the most amazing sights at NAB 2016 could be found nestled in the back the South Hall at Las Vegas Convention Center. Comcast Wholesale was exhibiting its multiscreen video solution. The Barry Tishgart, Comcast Wholesalecompany’s mission is take the technologies and services of Comcast and make them available to industry partners. Comcast Wholesale announced a new video product that Barry Tishgart, VP of IP Services, described as “powering the new television ecosystem on every screen. “

And operators will need this functionality if they are to persist into the Internet era of television. They will need it to face off threats both indirect and direct, which are multiplying online daily.

Indirect threats are increasingly coming from pay TV partners such as Starz, CBS, and PBS. I spoke with Eric Wolf, PBS’ VP of Technology Strategy and Management, at NAB and he told me the company is just about to launch a new direct-to-consumer app for kids. It will include linear and VOD content, as well as fully interactive games. Though individually these new video services don’t pose a threat to pay television, in aggregate they work to erode the core pay TV proposition.

Amazon Prime Streaming PartnersAmazon’s Streaming Partners Program is a direct threat to traditional pay TV. One of the problems with the many individual SVOD services is that they are hard to find and to manage for consumers. Amazon aims to change all that. It is reselling SVOD providers through its Prime Video service, and now it is available on a monthly standalone basis the barrier to entry into this a la carte OTT TV ecosystem is just $9 a month. Amazon shows every sign of signing up all the 100 or so smaller SVOD providers, and added SeeSo (from NBCU) this week.

Other direct threats include new vertically oriented virtual pay TV operators such as fuboTV. fuboTV is chasing millennial Hispanic males with a soccer-anchored linear TV service.

The message is clear for pay TV providers. Online video services, both individually and in a la carte bundles, are zeroing in on specific demographics and interest groups. The content set they are building is smaller and tightly focused on the selected audience. The price-point for entry is also dramatically lower.

To remain competitive, operators will need an infrastructure that allows them to quickly build and launch multiple services targeting much more constrained audience groups than are currently served by the big bundle. That said, they will need to maintain their traditional pay TV services, perhaps indefinitely, as consumers chose when to transition to the new Internet delivered entertainment services.

That is where Comcast sees its opportunity. It has proved that the IP and cloud infrastructure that it has built is capable of supporting multiple approaches to reaching an audience. The company has launched the big-bundle-based X1, a stripped down millennial focused IPTV service called Stream, and a broadband VOD service called Streampix, all leveraging the same underlying architecture. It is that solution that Comcast Wholesale is bringing to other operators, like Cox Communications and Shaw Communications.

Comcast Wholesale is far from the only vendor selling such solutions. Providers like Ericsson and Cisco have beefed up their operator solutions to embrace cloud technologies such as virtualization and CDN solutions. Verizon, Akamai and Brightcove are upgrading their ability to bring broadcast-level delivery and management to the whole video delivery chain. The race is on to make Internet delivery as robust, scalable and manageable as the traditional television networks of old.

Why it matters

At NAB 2016 it was clear that a flood of small, tightly focused, and cheap video services are about to hit the web.

These services will be both direct and indirect competition for pay television.

In order to competitive, pay TV operators will need an infrastructure upon which they can quickly launch multiple services capable of reaching all screens.

Comcast wants to be one of the main providers of this infrastructure to other pay TV operators.

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