From OTT "Siege” into full-out “Invasion”

Last week, Moody’s released a new report that pay-tv businesses and networks will likely find intriguing. Titled "Pay TV and Television Networks -- US: OTT Invasion: Grand Bargain Required forLong-Term Sector and Credit Stability,” the findings indicate that over-the-top services appear to be the model for TV that is showing the most growth.

“If the masters of big media and distribution were placed in a room and asked to start from scratch, to create a TV business model using the latest technology and providing a product most appealing to consumers and most efficient for advertisers, it would look a lot more like Netflix and Facebook, respectively, than today’s television ecosystem,” said Moody’s senior vice president and analyst Neil Begley. “So, the best option is for the largest companies in content production, aggregation (networks) and distribution (pay-TV providers) to come together and agree on new contractual constructs supporting a new platform supported by the latest available technology that will underlie video distribution and the advertising that subsidizes its cost.”

The report also suggested that television companies should “end the linear distribution model.”

It’s a bit of a shift from a Moody’s report published in April last year, “High Yield Cable's Broadband Still Effective Defense Against Over-the-Top Siege.”

At this time, it was recommended that investors should “stick with cable despite [the] OTT rush.” Seemingly, in a little over a year, the winds have changed.

The results are also in line with Nielsen’s newly released Total Audience Report for Q1 2016, which revealed that SVOD/OTT options and DVRs are now available in 50% of U.S. TV households.

The OTT “invasion” sounds quite permanent. That would make it an occupying force – one that is not likely to be expelled.

Author: Brian Cameron

TV Research & Analytics- Track & Analyze Pre & Post Airing Schedules

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