OTT threat to pay TV overstated

The proliferation of over-the-top (OTT) video services does not present a threat to traditional pay TV platforms, according to research group IMS.

“Headlines from various research firms that overplay the risk of cord cutting illustrate just how important over-the-top (OTT) video services have quickly become in the whole home entertainment experience,” IMS notes. “Yet, IMS Research has a slightly different opinion on cord-cutting compared to several research firms, and does not regard OTT video as any significant threat to pay-TV operators.”

IMS forecasts that digital cable, digital satellite and IPTV subscribers numbers will increase in 2011. Furthermore, it adds that the monthly revenue per user is far greater at the traditional platforms than at OTT services.

“Current-day claims that OTT video is a significant cord-cutting threat seem overstated, and also fail to recognize that the pay-TV industry is already busy working on OTT delivery methods of their own,” says Paul Erickson, senior analyst at IMS Research.