Some over-the-top subscription video suppliers (Netflix) are thrilled around the declining demand for linear video services, as it is the business problem that creates their revenue streams.
source: emarketer
Legacy suppliers are worried because they face a decline of their large existing businesses, as well as the danger that if they create OTT streaming alternatives of their own, they will simply accelerate abandonment of linear services.
This is a familiar problem. Telcos faced the problem when pondering the way to respond to the rise of OTT voice and messaging services. Sure, they could create and heavily market their own OTT services, but only at the risk of cannibalizing their existing high-margin, high average revenue per user legacy services.
Still, as the abandonment of linear services grows, so does the opportunity to create new OTT services--mobile, especially--that cater to the swelling numbers of consumers who have no appetite for $100 a month linear services.
In 2017, in the U.S. market, there will be 56.6 million people who do not buy a linear service. If one assumes 2.5 people per household, that represents 22.6 million U.S. homes that are candidates for one or multiple OTT streaming subscriptions.
In the mobile realm, the opportunity arguably is greater: fully 56.6 million people customer accounts with multiple potential sources of business value.
In some cases, there is a direct revenue subscription opportunity. In other cases there is indirect value, in the form of reduced churn and increased ability to attract new customers. For mobile service providers, there is the ability to create a huge base of targeted advertising opportunities.
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