Category Archives: Entertainment

Vies for Cord

AT&T’s move into streaming TV makes sense as more and more consumers are watching digital content on their TVs, laptops and mobile devices through OTT services. eMarketer estimates that there will be 188.1 million OTT video service users in 2016, rising to 206.1 million in 2020. YouTube is included in eMarketer’s estimates. Because its audience is so large and well-established, it makes the growth of the entire category appear to be less dramatic.

Many OTT viewers have increased their digital TV and video content consumption after cutting the cord to cable TV. eMarketer expects the number of cord-cutters (and cord-nevers—those who never have had pay TV) to rise substantially over the next few years, growing from 17.8% to 22.6% of the US adult population between 2016 and 2019. AT&T’s move into the live-TV streaming space is a new way to offer potential viewers access to traditional live TV content that they would typically view via cable subscription.

AT&T is looking to attract subscribers with a variety of deals, including an introductory pricing option of $35 a month for a package of more than 100 channels. AT&T is also including a fourth-generation Apple TV to customers who sign up for 3 months of pre-paid DirecTV Now service, and an Amazon Fire TV Stick with 1 month of pre-paid service. Additionally, AT&T mobile customers will be able to stream the content via the DirecTV Now app without worrying about monthly data limits.

While these offers may be tempting for some customers, it may not be a deal-driver for many, said eMarketer analyst Paul Verna. “Price is one of the factors people take into account when choosing a pay TV service, whether a cable- or satellite-delivered one or a digital streaming package,” he said. “However, consumers are also picky about what shows, movies, sports, live TV, and local channels they watch. In that regard, they tend to select services based on how closely they match their wish lists, as opposed to simply choosing on the basis of cost.”

DirecTV Now’s content does come with some caveats. It reportedly does not offer consumers a DVR option, excludes CBS (which offers its own live streaming service) and does not offer local networks not owned by ABC, NBC or Fox.

AT&T also faces competition with other existing cable-like streaming services such as Sling TV and Sony PlayStation Vue. The market is expected to become even more competitive in 2017 with Hulu’s expected move into live TV, which will include channels such as ESPN, ABC and Fox, as well as YouTube’s new “Unplugged” service, which will offer a bundle of not-yet-announced cable TV channels.


Caught Up in South Korea

Last week, the government cut its planned spending to develop the VR industry by roughly 42%, reducing the amount to 11 billion won ($9.8 million).

The cut came amidst a rapidly escalating scandal involving President Park Geun-hye. South Korea’s parliament voted to impeach Park last week. She is accused of giving an unofficial adviser wide latitude in government affairs that led to preferential treatment, including kickbacks. Park has rejected the charges.

There has been no direct link of the scandal with the reduced VR investment. A government oversight agency said the reduced investment reflects concerns about transparency in the formation of the project and lack of understanding about the project’s goal.

VR in South Korea has been less focused on game and entertainment applications, and more on industrial use cases, such as architecture and engineering. The government investment was part of a joint public/private effort to encourage the development of gaming, entertainment and education platforms.

Hardware companies such as Samsung Electronics and LG Electronics offer a variety of VR devices including headsets and 360 degree cameras, but software and content for VR has been less of a focus. The government investment is meant to address that.

Not all areas of VR were affected equally by the government cuts: Investment in game content was not reduced. “Games are the area that will drive the most growth,” said Baek Hyun-jung of Innocean Worldwide, a global marketing and communications company.

With South Korea’s government stepping back, China may step in as an investor. “China’s VR market is growing at a very fast pace, yet their content is not diversified,” said Baek.


Coming with the Launch of HBO

HBO unveiled its latest standalone video-on-demand (VOD) service, HBO España, in November, offering subscribers access to original programming such as “Game of Thrones” and “The Wire,” as well as additional content from Disney and Nickelodeon. The service is similar to the firm’s other digital-only platforms, like HBO Nordic and HBO Now, in that it doesn’t require a pay TV subscription.

Spain may seem an unlikely choice for HBO’s newest venture.

The Spanish TV landscape is still very traditional, with most viewers tuning in only to free-to-air broadcast programming. Though the number of pay TV subscribers is rising, just 26.7% of households in Spain had pay TV as of Q2 2016, according to Comisión Nacional de los Mercados y la Competencia (CNMC). By comparison, 75% of US households were pay TV subscribers in April 2016, according to GfK.

What’s more, few of the SVOD platforms operating in Spain have gained serious traction. CNMC found that Netflix, which launched in Spain in October 2015, was used by just 1.8% of internet households. Local platform Yomvi was more popular, but the service is also offered bundled with a subscription to pay TV provider Movistar+.

But what makes Spain unique in Western Europe is that about half of households have broadband but not pay TV, one of the highest internet-only household rates in Europe, according to research firm Parks Associates. And, consumers in Spain are also more likely than those in France, Germany and the UK to trade in a pay TV subscription in favor of a digital video service. HBO is likely to be targeting those consumers.

This isn’t the first time that HBO has placed its bet on a country of “cord cutters” and “cord nevers.” In 2012, the firm launched HBO Nordic in Denmark, Finland, Norway and Sweden—countries with some of the highest levels of internet-access in the world but relatively low pay TV penetration rates. Despite some early struggles due to content offering and video quality, HBO Nordic has managed to gain a foothold in the region. According to Mediamätning i Skandinavien (MMS), 9% of the population in Sweden had access to HBO Nordic at home in Q2 2016, making it the third-most popular paid SVOD service after Netflix (34%) and Viaplay (19%).


Watch TV live

A recent study of TV viewing habits among adult internet users in six countries in Western Europe found viewers in the UK were the most likely to watch catch-up or on-demand TV, and the least likely to tune to live TV programming.

According to October 2016 data from the Office of Communications (Ofcom), just 60% of UK respondents said they watched TV or films live on free-to-access channels, a rate lower than the two-thirds to three-quarters of respondents in France, Germany, Italy, Spain and Sweden who said the same. Conversely, higher shares of UK respondents watched free-to-access catch-up or on-demand TV or films (61%) and recorded TV or films (51%) than did their continental contemporaries.

Ofcom’s 2016 figures echo the findings of the 2015 version of the same report, which also found the UK with the largest share of internet users (44%) who watched free-to-access broadcaster catch-up TV services. The main difference is that usage had grown, both in the UK and in the other countries studied, in the time between studies.

So, while internet users across Westrn Europe are watching more TV via free catch-up services, UK users are still the most likely to do so.

There are kinks to work out. Even though the app is currently in beta (it’s expected to be released later this month) Tango’s AR platform has some limitations. For one, shoppers aren’t seeing how the clothes look on themselves, but rather a virtual mannequin, which approximates their size. Instead of putting in their own measurements, shoppers choose from five body types, ranging from extra small to extra-large.

The app is also only available on a limited number of phones that support Google’s Tango AR technology. Specifically, Lenovo’s Phab2 Pro and Asus’ ZenFone AR. Google plans to have the technology implemented across all mobile devices, Bloomberg reported. But when that will happen is unknown.



Sky is part of a global

21st Century Fox finalized its deal to acquire Sky, the largest pay TV service in Europe, the latest combination in a global wave of consolidation in the TV industry, which is responding to rapid changes in the way that consumers watch video programming.

From the perspective of overall market growth, the pay TV sector hardly seems like the most attractive investment, with many researchers foreseeing slim growth in users or revenues this decade.

Ovum estimates that pay TV revenues for the region as a whole will grow only 12% from 2015 to 2021—a mere 1.88% compound annual growth rate.

Data from other researchers paints a similar picture. According to a report from Digital TV Research Limited, the total number of pay TV subscriptions in Western Europe will barely edge higher in coming years, reaching 175.2 million in 2021, up from 172.2 million in 2016—a compound annual growth rate of less than 1%.

Pyramid Research says that pay TV penetration at the household level will grow to 60.2% in Western Europe this year, up from 58.6% in 2015.

Whatever the growth of pay TV, overall video consumption is growing rapidly, and Sky is a key provider of a particularly compelling content format—sports. “Despite the fact that pay TV subscriptions are dwindling, the Sky acquisition makes sense since pay subscribers are willing to pay for sports and entertainment content that is unavailable elsewhere,” said eMarketer analyst Gerard Broussard.

That highly compelling content is valuable however consumers end up viewing it—whether OTT or some other digital format, and whether it is monetized via advertising or subscription payments.