The battle for consumers within the consumer space is fascinating: Sky, Virgin, and BT as the established main players have a leading position in the market due to the investment they have made in cable infrastructure and content.
They have spent heavily to secure premium content such as the movies you will see first on these platforms, sports that are only shown live on these platforms (Premier League/Ryder Cup) and have diversified well to enable you to take your service with you through a wifi-enabled service, for example SKYGO.
I would estimate that the average UK household is spending between £30-£100 per month on such services but I wonder if the future landscape will change? Is it really viable that customers will continue to pay at these levels – purely because they can only see certain content first or at all on one particular platform?
For my generation, I suspect this will be the case but the younger ‘gaming generation’ may have something to say about this. They are living their lives already through the internet: there is already an expectation that they can do almost anything through their phones/tablets – from finding love, to keeping in touch, listening to music, and of course watching films. There is an insatiable demand for ‘everything over the net.’ Services such as Netflix and Apple TV are becoming mainstream with movie libraries and popular new original content, such as Narcos on Netflix.
I predict that future generations will ‘expect’ their TV service to be delivered at low cost and via the Internet. They will place increasing pressure on established cable providers to reduce their pricing and this will challenge those organisations that are not already planning to meet this challenge head-on.
What will this mean? I suspect established cable providers will face some difficult questions regarding how to invest in content. They will not be able to assume the full cost can continue to be passed through to the consumer if the customer is not prepared to pay such a high price. In a market free of competition this can work, but in one where new entrants are continually challenging the rules, it is a highly risky strategy.
I have no plans to change my service because I am a sports addict and want to watch live sport when I want it. I can’t vouch for my kids though… and what if an online alternative starts offering most of the sport that I want to see?
‘What do you think? Leave a comment if you think the ‘gaming generation’ will change the rules on how content is purchased or get in touch direct via my LinkedIn profile.
Photo by Sarah Barker licensed under Creative Commons.