2019 Predictions for the Pay TV industry

In the spirit of the new year, I offer some predictions for the Pay TV industry in 2019.

1. 1. Your TV’s HDMI1 connector will increasingly be likely to have a streaming video device connected to it, instead of a traditional TV set-top box. The primary exceptions will be hybrid STBs that combine IP and non-IP sources in a single user experience, and smart TVs with the streaming electronics and apps already built in. With a diminishing number of exceptions (such as live sports), the most popular pay TV programming is distributed over broadband anyway.
   2. If you buy a TV today, it will be a smart TV with an ecosystem of apps and other software built in.  Consumers are evaluating smart TVs not just as upgrades from HD to UHD, but also for the apps.  Roku and others have been successful there – will Apple go beyond licensing just AirPlay to smart TV manufacturers?
   3. To combat the theft of both live and on-demand programming, anti-piracy solutions will hit their stride. As these solutions mature, they will become fully integrated solutions that include watermarking, monitoring, chip-level security, the tracking of password-sharing, and professional services. They will be able to simultaneously enforce punitive measures against pirates and enable marketing opportunities for operators.
   4. AI will become increasingly important.  Two examples are to measure and evaluate end-user navigation in the user experience and identify areas for UI improvements, and to identify out-of-profile usage of consumer authentication credentials as piracy risks.
   5. Current efforts at vertical integration between pay TV operators and content providers are not guaranteed to succeed. In the US, top-tier premium programming owned by a top pay TV operator has disappeared from a competing pay TV service because the former changed business terms for the content. Unless content-owning operators reconsider such practices, moves like this will only reinforce consumers’ bad impression of pay TV, accelerate cord cutting as a whole, and potentially force regulators to take action.
   6. The TV technology vendor communities will continue to shift like tectonic plates, as companies attempt to shed low-producing assets while pursuing new opportunities. On the asset-shedding side, one current example is ARRIS-ComScope and what will happen to ARRIS’ set-top box and video security solutions. Another is Technicolor’s set-top box business. On the new opportunities side, there’s Synamedia and the future Verimatrix-Inside Secure, assuming the latter happens.
   7. Because Google offers Widevine CAS and DRM for free and because online video is now the norm and not the exception, vendors in the pay TV security category will accelerate their plans to enter new market opportunities that are on the upswing by leveraging existing assets for new use cases – even use-cases outside of pay TV.
   8. Similarly, operator adoption of (free) Android TV has forced middleware and service delivery platform vendors to respond with compatible products.  But Android TV was not designed for traditional or hybrid set-top boxes.  Middleware and SDP vendors that don’t fill those gaps by providing custom launchers and other client components to accommodate Android TV will lose deals and lose market share.

Hope your year is already off to a good start!

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