ABI: TV Operators at Risk of Losing $16.8 Billion to Online Video

OYSTER BAY: ABI Research has unveiled through its new Technology Barometer study that 20 percent of online consumers consider Internet video as a replacement for pay TV, which poses a significant risk to traditional TV operators of as much as $16.8 billion in the U.S., according to the firm.

The U.S. pay-TV household penetration is expected to decline by approximately 0.5 percent per year through 2017. ABI Research says that this slow migration will continue despite the economic recovery, as consumers now have additional entertainment choices such as improved online and OTT video experiences. The firm suggests that to offset this, TV operators would need to build a business that leverages OTT components.

“While many OTT services focus on movies, the goal of lightweight pay-TV packages should be to introduce customers to the brand and tease customers with premium content offerings,” said Sam Rosen, ABI’s practice director for TV and video.

The study also notes, however, a larger long-term opportunity: 30 percent of online consumers that have pay TV and the foundation in place for OTT services, but do not yet see the value proposition for online video.