Verizon may have placed the keynote speaker at TelcoTV, but this show is really about Tier II and Tier III providers, a bunch of scrappers ready to beg, borrow and steal if that's what it takes to get into the video business.
The Wednesday morning breakfast session at TelcoTV was largely concerned with over the top, because who isn't concerned by over the top?
Doug Sylvester, chief strategy office of Avail-TVN, noted that cable lost somewhere in the neighborhood of 700,000 subscribers last quarter, but about 600,000 of them went to DBS or IPTV. That's just people switching providers.
So, that leaves only about 100,000 people no longer with a managed pay-TV service. That's a very small sliver of the pay-TV audience, and nobody is yet certain about where they went, or why.
There are a lot of OTT sources, but Netflix currently is the major threat. Netflix's DVD model was easy – they buy the DVDs, then distribute them, and don't have to share revenue with the content owners.
Streaming, on the other hand, is a different model. Netflix does have to share revenue, and it is still getting content that is older, if not stale. That's going to make it harder for Netflix if it tries to transition to a streaming model.
Sylvester believes that Netflix is a legitimate threat here and now, however, simply by dint of how many subscribers it has and how much use they get out of the service. He revealed that a top-five cable provider told him that on any given night in primetime, 30 percent to 40 percent of that operator's bandwidth is devoted to streaming Netflix content to its subscribers.
John Gildred, president of SyncTV, observed that while some companies trafficking in OTT technology are competitors, some would, in fact, prefer to be partners with service providers. Companies such as Roku and Boxee are not the competition yet, he noted, but they will be if they have no other choice but to go to the Apples and Netflixes and Amazons for content.
The first keynote on Wednesday morning was given to Verizon product development manager of video services, Joe Ambeault, who introduced the company's new Flex View.
"Consumers get very frustrated," he noted, with the inability to move their content. Referring to most modern mobile phones also being cameras, Ambeault said: "We still hear, ‘Our pictures are trapped on our device.' Now, with Flex View, it's one click, check a box, and the photos are now available. They just pop up on the TV, on the PC. It's in the cloud. It's on all those devices."
The same will work with video, although that was harder to accomplish, he said. "I've got a Flip cam: How do I get video off there? With very little technical knowledge, all of our customers will be boring each other with baby videos, graduation videos. The media manager will ask you what's your connection, one click for access, just click play, and it works on any device."