will 5G Video be a Threat to Fixed Network Linear TV?

It remains unclear how big a threat to fixed internet access 5G will prove to be, in both fixed and mobile modes. But it might also be argued that mobile video over 5G might indirectly also affect the fortunes of linear video services. The indirect impact might occur as some form of future mobile-optimized video service is possible. 

There are a number of dimensions--some more likely than others--upon which new mobile-specific services could be differentiated. If video is intended for viewing solely on a mobile or other relatively-small screen, some image quality (and degree of image compression) might be possible. 

Though it has not been tried yet, in principle it might be possible to create mobile-only services, formatted for small screens, that focus on micro content (single TV series, perhaps), single channels or single episodes that do not cannibalize skinny bundles or full linear services too much. 

That a la carte access is tricky and dangerous for many content owners. In many cases, there simply is not much demand for whole channels, so both advertising and subscription upside is sharply limited. 

Also, the billing and fulfillment cost for many niche and a la carte buys arguably is simply too onerous for niche services. 

The biggest threat to big linear bundle or many skinny bundles is simply the number of customers who are quite sure there are only a few channels, or perhaps several, that supply 99 percent of the total value of any bundle (full or skinny). 

If those few or several channels are available at low-enough prices, it might well make sense to abandon subscription bundles altogether. 

Personally, I now find, with multiple over-the-top subscription services, that my linear “must-have” channels have dwindled to a maximum of three. In other words, nearly the full value of the linear subscription (99 percent) comes from ability to watch just three channels, and of those three, one of the channels is only required a handful of times a year. 

So maybe 90 percent of total value of a linear video subscription is really from just two channels on an “every day” basis. Even if price can range up to $100 a month, value is something far less. 

For that reason, I’d argue that skinny bundles are not yet skinny enough to prevent most danger of linear video subscription cannibalization. The rule of thumb used to bve that no single viewer watched more than a dozen channels. 

In an era where many consumers routinely buy multiple video subscriptions, that number likely has dropped sharply. 

Use of 5G as a substitute for fixed network internet access is one type of revenue threat to fixed network service providers. What now remains to be seen is what indirect effect 5G-enabled video might have on linear or OTT services.