According to SNL Kagan, the ability to access the full HTML Internet, over-the-top (OTT) video services, apps and TV Everywhere from mobile devices has reduced the incentive for consumers to pay for dedicated carrier-based mobile video services.
“With an eye on preventing an exodus to device-agnostic OTT services like Netflix and Hulu Plus, multichannel operators have rolled out TV Everywhere apps, but these have so far been met with a lukewarm consumer response,” the group says. “For now, OTT apps like Hulu Plus and Netflix are resonating more with consumers than are TV Everywhere apps from multichannel operators.”
Free video iPad apps from major content owners, including Disney, Viacom and Time Warner, “are doing great,” SNL Kagan adds; however, “paid video apps are not doing as well. This is shifting emphasis towards video app advertising to generate revenue.”
There is positive news, however. The research firm notes many content owners are starting to view mobile as “a necessary churn-reduction tool” to complement existing multichannel subscription services and less as an opportunity to generate new revenue.