More than 50 percent of U.S. broadband households now watch internet video on a TV screen, Parks Associates reported this summer. The research firm says the shift in video consumption habits, including use of over-the-top (OTT) video services, has fundamentally changed the businesses of broadcast, pay TV and online video.
“For years, the television has been the stronghold for the traditional TV industry,” said Brett Sappington, Parks’ senior director of research. “Today, more televisions are connected to the internet than ever, either directly or through connected devices like game consoles or streaming media players, such as Roku or Apple TV. The fact that one-half of broadband households watch internet video on a television shows that we are well past a tipping point. The market has fundamentally changed.”
An even more recent Hub Research study found that 52 percent of U.S. TV viewers prefer to watch their favorite shows via digital sources such as Netflix, compared to just 31 percent who prefer to watch “on live TV.”
Just the Beginning: Video’s Multiple Roles
This first explosion of internet-delivered video to the home, largely enabled by Netflix, is just the beginning. The quick spread of broadband, the ubiquity of WiFi and the tremendous interest in smart home appliances – perhaps most dramatically evidenced by bursting sales of Amazon’s Echo and Dot, controlled by the virtual assistant “Alexa”— promises to dramatically reshape the nature of the nation’s homes, as well as several consumer retail markets. We call this coming world of exponentially proliferating smart devices the world of “connected engagement”.
Video, enabled by broadband and WiFi, is the catalyst that’s finally made these sorts of devices simple to control, easy to understand and interesting to consumers.
Five years ago, virtually no one had heard of a “smart home” or the “Internet of Things”, but within the last two years, both have begun to hit the mainstream big time. More than 40 percent of U.S. broadband household plan to buy a smart home device in the next 12 months, and analysts predict that 50 percent of all American homes will be “smart” by 2020.
Video in a smart home is used not just to provide digital entertainment content to TVs, phones, PCs and tablets, but also to provide real-time information about all kinds of smart devices. It’s not just video surveillance, either. Smart ovens will be video-enabled to show you what your food looks like as it’s cooking, while smart locks and smart heating/cooling systems will be cued to act by motion sensors and video capture. Robot vacuums and mops will use video to provide you cleaning reports, maps and schedules. Then, smart health and fitness appliances will use video to display and report information about blood pressure, heart rate, body mass index, fat, water, muscle mass and bone composition. Video will completely enable the reshaping of at least two major industries: Education (via remote learning) and health care (via remote monitoring and treatment, or telemedicine).
The WiFi Service Opportunity
Managing all these hardware devices being delivered in rapid-fire fashion from multiple vendors all trying to claim a stake in the new smart environment represents a huge challenge—but also an opportunity.
Tomorrow’s homes will make ample use of video over WiFi to view video via smart phones, tablets and streaming boxes. Helping manage those devices is a tremendous opportunity for today’s broadband providers.
The Netflix revolution was the Big Bang of the video revolution. Broadband providers missed it. Instead of innovating, enabling and offering video services themselves, they waited and stuck with their cash-cow models. Then Netflix came into the market and radically disrupted and changed it. Will broadband providers miss opportunities in this next explosion, too?
The most obvious and tremendous opportunity is the chance to deliver high-quality, reliable and fast WiFi that just works. Internet providers to date have mostly been delivering internet to their customers’ homes, but not to the devices they use. With the explosion of WiFi-connected, personal devices, WiFi is now the internet.
The opportunity here is partly to deliver desperately needed efficiency and streamlining to the management of a complex galaxy of often incompatible devices. Today’s connections struggle with incompatibility, slowness and the need for continual reconfiguration. A management platform that removes this complexity from the subscribers and offers near instant connection, auto configuration and continual real-time auditing and updating can realize tremendous efficiency for broadband providers, and build profitable revenue on simply that.
But there’s also an opportunity in top-line revenue. By 2020, analysts predict, broadband households will purchase more than 55 million smart devices.
The top-line revenue opportunity for providers here is to deliver WiFi that’s reliable and fast to all members of a family or business, directly to their WiFi devices, in a way that is consistently reliable and provides the speed needed for high-quality video.
Who will be the Netflix of connected engagement, the coming second video revolution? Let us know your thoughts in the comments below.