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Tuesday, April 26, 2016

Ellation: Internet access may be greatest challenge for the connected home industry

Arlen Marmel, VP of Marketing and Distribution, Ellation, provides insight on several key industry trends for Parks Associates’ 20th-annual CONNECTIONS Conference, which will be held May 24-26 in San Francisco:

How is your company engaging consumers through new technology solutions?

Ellation is all about connecting with and “super-serving” our passionate audiences. As an over-the-top streaming video on demand service, we’ve built our technology offerings end to end, while constantly iterating on and innovating our products and services to engage with our audiences and provide the best viewing experience on as many devices as possible. We want to provide our users with a robust, 360-degree experience, so at Crunchyroll, for example, we also engage our audience through customizable user identity options, rich comment sections and discussion forums and an e-commerce marketplace where we can engage with our users on even more levels.

What is the biggest change you have seen in the past year in the connected home and entertainment industries?

The biggest change has been the continued cementing of OTT viewing as a mainstream option. According to a recent study from Parks Associates, 33 new OTT services entered into the U.S. market in 2015. Among all U.S. broadband households, 64% subscribe to an OTT video service, up from 59% in 2015. And as of this March, there were 101 OTT video services available in the U.S. market.

Moreover, a recent AOL found that 42% of people prefer to watch TV shows online, and 11% of people have discontinued paid TV service to watch TV online exclusively, while another 13% said they have plans to do so within the next six months. At Crunchyroll, just 60% of our subscribers pay for traditional TV services (compared to roughly 90% of the general population), and roughly 30% have cut the cord in the past 12 months. And advertisers are noticing; twice as many advertisers are planning to spend on OTT in 2016 as in 2015, and the amount they’re spending is going up. All this is to say that home viewers are making a shift online, and industries are taking note and responding in kind.

What do you think is the biggest driver for the connected consumer market?

Among the numerous driving factors, the one that stands out the most might also be the simplest: internet access. High-speed internet access is the catalyst for OTT video—without it, streaming doesn’t exist or, if it does, quality suffers greatly. The proliferation of reliable high-speed internet around the country (and the world) have made it possible for so many people to make OTT SVODs their primary sources of video entertainment. As innovations in the ISP industry continue to bring high-speed internet to more people in more remote areas around the world, there will be even more opportunities to offer our users the next wave of innovations.

What is the greatest challenge for the connected home industry in the next year?

Along with being the biggest driving force, internet access may also be the greatest challenge for the connected home industry. Though many people in cities have access to high-speed internet service, such service is often less available in rural parts of the country. A recent FCC report found that nearly one fourth of the population in rural areas—about 14.5 million people— lack access to service at threshold speeds (at least 10 Mbps downloads, 1 Mbps uploads), and, more generally, 19 million Americans—6 percent of the population—still lack fixed broadband service. Despite all the advancements we’ve made in spreading internet access, millions of Americans are still left without high-speed internet, or are without internet fast enough to support streaming services. Internet access is a double-edged sword in our industry: it’s a driving force, but also a roadblock.

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Marmel will speak on the session “OTT and the Transformation of Pay TV” on Wednesday, May 25 at 9 a.m. Other speakers on the panel include Assurant Solutions, BrightLine, Rovi, and Ericsson.

For more information on CONNECTIONS, visit www.connectionsus.com or register by clicking here.

Next: Convergence of mobility, cloud, and web technologies is biggest driver for the connected consumer market: Insights from Ericsson
Previous: Customers want IoT devices to solve all their problems while still being intuitive and simple to set up: Insights from Centercode


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