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Straight Talk Media & Entertainment

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Midway through 2017, the debate over the longer-term viability of traditional TV and linear viewing is echoing loudly as commentators increasingly reliant on the "even a stopped clock tells the right time twice daily" approach persist. Rather than saying the same thing for years until we're right – or everyone forgets what we were wrong about – we at Ovum prefer to dig deeper into our industries and markets to offer more original and more nuanced takes on how the TV and video landscape will evolve.

Ovum is segmenting our existing subscription-based OTT video forecasting and analysis into two categories: subscription-based video on demand (SVOD) and a new category we're calling subscription-based linear OTT video streaming, or "SLIN" for short.

SVOD is relatively well understood, given established services such as Netflix, and has long been a mainstay of Ovum's analysis of OTT entertainment.

SLIN addresses the proliferation of subscription-based OTT video services based on a linear streaming, as opposed to an on-demand, viewing experience. The difference between SLIN and SVOD is akin to that between watching a TV channel where shows are aired according to a schedule, and watching a chosen show (or box set) from a catalog at the time of one's choosing.

Broadly speaking, we think it useful to distinguish between four types of SLIN service provider:

  • linear OTT services from pay-TV operators, aka skinny bundles, e.g., Sky's Now TV, AT&T's DirecTV Now
  • broadcasters offering OTT services direct to consumers (D2C), e.g., HBO Now, CBS All Access
  • rights-owner D2C services, e.g., MLB.TV, WWE Network
  • §video game–focused OTT video services, e.g., Twitch.

    Of course, the term SLIN has its flaws: most SLIN services also offer on-demand catalogs and are in effect hybrids. For forecasting and market share analyses, we will tend toward considering a service as SLIN if it includes a linear component, even if it also offers on-demand viewing.
    SLIN differs from SVOD in three critical ways:

     

  • Access to valuable content. Many SLIN services offer first-run TV shows at the same time as traditional TV, especially live sports coverage and other premium content historically restricted to traditional broadcast TV windowing – and denied to SVOD providers such as Netflix until later release windows.
  • Real competition with traditional pay TV. SLIN services also appear to be more directly substitutable for pay-TV services, especially when bundled with broadband and mobile. As our primary research has strongly indicated for years, most people take SVOD in addition to, rather than instead of, traditional pay-TV subscriptions.
  • Unprecedented technology challenges. Delivering linear streaming at high quality to anywhere close to the scale effortlessly offered by broadcast TV will require investment and innovation from companies across the value chain, from service providers, platform vendors, content delivery networks, to device vendors.


In short, SLIN promises the heady combination of the scale and accessibility of OTT with the economics of TV. Its success, or otherwise, will probably only be revealed slowly. Furthermore, the outcome will probably be different depending on where in the world you're looking. But we're convinced it's a segment worth watching.

Ovum will release SLIN spending and subscriber market share forecasts by service across more than 70 countries from July, when SLIN will become a core segmentation in our OTT coverage. We will be discussing the findings with our clients in July. To book your meeting, please contact clientservices@ovum.com.


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