According to The Diffusion Group, pay TV operators must execute three specific tactics in order to defend against emerging competitors and take full advantage of their unique position in the video value chain. Specifically, TDG argues that pay TV operators must:

• Push existing cable network TV programs online
• Deliver today’s Internet-only content and bonus material directly to the TV set
• Offer broadband TV services without requiring a traditional pay TV subscription (as a stand-alone service)

By executing these three strategies, pay TV operators will enhance their defensive position, recapture the attention of the Internet generation, and generate an additional $2 billion in annual revenue by 2013, according to TDG report "TV Service Providers and Online Video – How Soon is Now?"

According to the report, it will not be long before a variety of companies including consumer electronics manufacturers, Web-based aggregators, and pure-play over-the-top video providers look to compete more directly with pay TV operators.

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