Mobile TV is part of a broader evolution of the subscription TV business model. Some have called this a shift to “TV as an app” (TV consumed over the top). And even when the revenue model is the same as linear TV (subscriptions), much else is different.
Two decades ago, “IPTV” mostly meant a different transmission format (digital rather than analog) and different suppliers (telcos rather than cable TV companies), but the same business model.
Today, the term IPTV has almost no meaning, as all video is digital, over every delivery platform.
For incumbents, the biggest change is that the subscription TV business is becoming much more open. Consumers used to “need” a specific decoder, supplied by a specific supplier, in order to watch their video.
These days, consumers often need nothing more than their smart TV, smartphone, their game console, tablet or PC to watch their subscription TV content, with no other equipment required.
That lessens the “lock in” to a specific supplier, eliminates the equipment rental charges and arguably reduces the scarcity value of the traditional linear video subscription.
That is among the important implications of the coming shift to mobile TV services. In one more major way, the TV subscription becomes an experience unshackled from a specific decoder, in some cases a specific supplier or network.
Some incumbents might still prefer to protect the older business model where possible. Some might note, for example, that Comcast’s Xfinity Stream app remains tethered to a linear Xfinity subscription. Others, including Verizon, AT&T or T-Mobile US, seem more inclined to cut their own cords, creating over the top alternatives not anchored to purchase of the legacy product.
As always, the concrete circumstances drive strategic choices. AT&T is the largest U.S. linear services provider, but its delivery platform is satellite, arguably the linear platform declining the fastest. Under those circumstances, forcing consumers to tie an OTT subscription to linear makes less sense. For AT&T, the competition is Netflix and other streaming services, including real-time streaming.
For Comcast, with the second-biggest linear footprint, hanging on to as much of the linear base as possible makes more sense, given the importance of that revenue stream for Comcast.
For T-Mobile US, mobile video is more a way to add value to its internet access service (also becoming a replacement product for fixed network video-plus-internet bundles).
Advertising potential is the other revenue source that grows as customer scale grows.
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