Devices such as Sling and Nomad are bellwethers in this multi-screen landscape. Much as DVR pioneer TiVo championed time shifting, Sling Media introduced early adopters to place shifting. In turn, Dish was the first operator to offer Sling to subscribers, creating as a result, according to Khemka, “a more loyal customer to the Dish brand.”
Like TiVo, Sling has its devotees. It also has distinct use cases, such as frequent travel and second homes, that are weighted toward the high-end market. But like most cable operators, Dish has been losing video subscribers. (DirecTV and Sky are still growing, but at a slower pace.) A rough analysis suggests that having a superior place-shifting technology does not by itself generate superior results. For its part, Sling is disseminating its technology across a wide range of platforms; at CES 2012, it announced its integration in Broadcom’s set-top system-on-a-chip (SoC).
The downside to some OTT solutions has been complexity. “The challenge is that the consumer has to be savvy enough to be able to set it all up,” says Sappington. The simplicity and user-friendliness of Wi-Fi enabled tablets perhaps has altered that equation. A larger question is whether the value of second and third-screen solutions is derivative.
If the value of additional screens is independent of the content paid for on the television, then the threat they pose grows. If not, their threat diminishes, reducing the motivation for cutting the “cord,” or dropping the dish. One complicated and moving variable is content rights.
Whether or how much “cord cutting” is occurring are much-debated questions. To cite one source, in a study commissioned by Orange (France Telecom), market research firm TNS released data in November 2011 indicating that the use of tablets in the U.K., France, Spain and Poland, where satellite TV dominates, is actually “cannibalizing” the home TV and PC usage.
But there are other views. Bart Palmer, CTO of Orange subsidiary GlobeCast Americas, which provides content management and transmission services for broadcast delivery, sees minimal threat. “We feel that new connected devices are just another method of getting content to consumers,” he says. “In this way, they are an opportunity because they drive and increase the consumption of content.”
“Studies show that viewing content on tablet and smartphones does not come at the expense of television viewing,” Palmer adds. “These devices are used ‘on the go’ or as part of a simultaneous multi-screen viewing experience. They do not replace the television.”
Supporting the optimistic view is the persistence of old models. According to recent, independent surveys by Nielsen and Turner Networks, monthly television viewing in the United States averages about 147 hours, not far off its all-time high. A report by the E.U.’s Open ContEnt Aware Network (OCEAN) project pegged European viewing last year at between 100 hours and 120 hours.
“We still see a lot of growth in that standard old linear television platform that goes to DTH and cable around the world,” says Tim Jackson, vice president, media product management at Intelsat. “We talk a lot about over-the-top and whether there’s going to be a replacement of traditional television viewing methods through these devices, and I’m not seeing that on the horizon. I see a lot of this as being very complementary.”