“That is the billion-dollar question for the whole
industry. If we begin to reach a saturation point, we
should notice it mid- to late-2018. I think that if we grow
throughout the end of 2018 in virtual MVPDs then what
you’re seeing is a sea change in terms of how paid TV
is offered and what it’ll look like in the future,” Sap-
pington says. “I think that you’re going to see more
services. If you see growth continue then you’ll defi-
nitely be seeing more subscribers attracted to those
platforms. I think the other thing you’ll see is a change
in competition. You’ll see more operators, more pay TV
providers, opting to get into the market for nationwide
services to compete nationally rather than competing
only within their wireline footprint.”
What consumers are looking for is reliable, quality
service and access to the content that matters to them.
Sappington is seeing strong growth in the upper end
of the market, with most households willing to pay for
three, four, or five different services.
Net neutrality rules are now history, and that could
spell big changes for the online video industry in 2018.
Sappington can imagine it turning into a positive for live
video. If operators create priority fast lanes for live video, speeding it along past content that isn’t time-sensitive, it could reduce live video latency. But if we reach a
point where video providers routinely have to pay extra
in order to assure good service, he thinks the FCC will
step in. In the short run, he doesn’t see much changing.
“I have confidence in the fact that the internet would
go freaking crazy if things got out of hand quickly. I
think that you would have people boycotting and complaining about ISPs in a way that we’ve not ever seen
before. That is a very vocal crowd,” Sappington says.
“There’s already relatively low net promoter scores for
broadband providers. I think that starts to become a
real issue and a real concern. Also, broadband provid-
ers would have to be careful, because if Netflix is the
number one video service and if you make the service
a poor experience, then consumers have every reason
to go to your competitor, even if it’s more expensive.”
“I think that any significant changes by any party that
could leverage a change in that policy would be ... I
think we would be unlikely to see that next year,” Peters
says. “There’s too much at stake in creating a discon-
tented user base by using that legislation to force be-
havior change in the audience. I think basically we have
to wait and see how that plays out, but my expectation
for next year is that we won’t see anything significant.”
One area that Peters is keeping an eye on is teen-
oriented social live video apps such as Live.me and Live.
ly. While these services have been around for years—at-
tracting a passionate but niche audience and allowing
some talented and telegenic young people to make big
money by talking to strangers from their bedrooms—
people over 30 are unaware that they even exist. Peters
thinks it’s time for them to enter the mainstream.
“I see a j-curve, with the x-axis being audience and
the y-axis being success or profitability, and I think at
the left side of the x-axis and the j-, we’ll see live plat-
forms where perhaps up-and-coming stars can really
connect with their fan base,” Peters says. “The currency
will be gifting and e-tipping—non-advertising curren-
cy. It’s been remarkable to watch how some of these
apps and platforms have taken off particularly with the
teenage segment, and there’s many anec-
dotes about young starlets making several
thousand dollars a month when they cash
out the electronic gifts.”
While many companies have created apps
to cash in on this social live video gold rush,
Peters says that isn’t sustainable. Look for
some services to fold or merge in 2018, while
major stars will emerge from these platforms.
Live video was the hot growth area for 2017,
and in 2018, look for it to expand and mature.
While on-demand entertainment drove the
rise of streaming video, live video will keep
it relevant and social.
Troy Dreier ( email@example.com) is senior
associate editor of Streaming Media and Onlinevideo.net.
Comments? Email us at firstname.lastname@example.org, or
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Hulu Live debuted in 2017, joining DIRECTV NOW and Sling TV as a skinny bundle vying for cord-cutters’ subscriptions.