The Role of POTV

We all know that POTS stands for “plain old telephone service”, so POTV should stand for plain old television, I think.  Where is it going?  Some interesting data on media consumption seems to validate the research and modeling I’ve done on the topic.  There’s a pervasive notion that OTT video is killing traditional channelized viewing, and while that’s an exciting thesis I have not been able to find any specific validation for it.  The best way to spot future trends is often in the subtle impacts they have in the present.  For example, a shift to dependence on OTT would be a shift away from scheduled viewing, and even if all a person’s programming were not available in OTT form you’d expect them to begin to utilize a DVR to pick up episodes for viewing as convenient.  So do they?

This latest report from Leichtman Research Group says that they don’t.  Even in households with DVRs (44% of US households have them) over 90% of all TV viewing is real-time channelized programming and not time-shifted by recording or exercising VoD.  This agrees almost totally with my model.  Thus, the current statistics don’t correlate with a massive behavioral shift.

There’s some other info in the report that might help understand what’s happening.  First, almost 80% of all Netflix viewing is on a TV, so the first thing we can see is that people are not happy with the substitution of PCs or tablets or smartphones for TVs in entertainment.  Second, 86% of Netflix users still subscribe to multi-channel TV service and 43% get premium channels, which is about the national average across the viewing households.  What these things tell me is that the penchant for youth to watch phones or PCs instead of TVs is in fact an attribute of the simple truth that they’re out of the home and avoiding supervision, and thus have no TV on hand to watch.  When people have TVs, when they are in the home, they watch TV.  And even the OTT-streaming aficionados use the service to supplement rather than to replace multi-channel TV.

I think this is yet another data point in the quest for truth on video.  Yes, young people behave differently than their elders (watch a couple YouTube videos if you want proof), but that’s YOUTH behavior and not an indication of a GENERATIONAL shift.  The youth, growing up and exposed to the same social pressures and family structures as other generations, behave more like their parents did in the past than like they did themselves.  Because they’re not youth any more.  We’ve always realized that grown-ups behave differently than kids in most areas; why would viewing TV be so different?

I think this validates an important point, and that is that entertainment television may be the thing that offers an access operator the greatest dependability in terms of ROI.  The Internet is eating voice.  The Internet’s bill-and-keep, all-you-can-eat, model is eating broadband profits and revenue growth.  Mobile is further from the top of the falls than wireline, but both are caught in the same currents.  TV isn’t caught there, it’s safely on the sidelines and able to generate a predictable ROI for years to come.  That means that if you are an access operator you had better have a TV strategy.



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