A recurring theme on my blogs has been that competition does not always come from where you expect it. BT Sport has just secured rights to screen the next Ashes series – five years ago who would have thought that a “phone company” would be competing to screen major sporting events?
But now companies that offer content are going head to head with traditional pay-TV companies. In the UK our dominant player since the 1990s was traditionally Sky, but with the arrival of content packaged up with Internet services things are changing fast.
I saw an interesting blog on LinkedIn that looked at the US market, where pay-TV has been far more dominant and for longer than in the UK – because of the effect the BBC has had on the British market. Quarter two was the worst sales period ever for US pay-TV companies. Together they lost of half a million subscribers and at about 0.7% of the entire market it does not sound like a lot, but could signal the way the market is changing.
What’s happening to the pay-TV market is exactly what I have talked about on this blog several times. Great content is king. Great content comes from the Internet, so any TV provider asking me to pay a subscription fee needs to also be offering me an Internet service that allows me to stream services such as Netflix. If that’s not on the table then I’m not going to subscribe.
The biggest players in the UK have seen this change coming. Virgin, Sky, and BT all focus on a package of services that includes phone, Internet, and TV. Customers have lost interest in the network itself. They really don’t care how the show gets to their TV so long as it works, is a good price, and when they need help there is an excellent customer service team ready to advise.
In many ways, the UK market appears to be more advanced than the US as consumers have less of a legacy attachment to pre-Internet cable operators, but in both markets it is the quality of the shows that will determine which companies gets the consumer business.
Sometimes it pays to think laterally. The traditional pay-TV companies used to advertise their subscriptions by promoting the shows you could watch on their service. However, the Internet has disintermediated these organisations in the same way as record companies are now trying to define why they exist in a world where artists can publish content that consumers can find.
So long as I can get a connection to the Internet, I can watch pretty much any content I want. The media wars of 2016 will not be about cable connections or network speeds, but who has the best content on their network.
What do you think about the changing media and Internet market? Leave a comment here or get in touch via my LinkedIn profile.