‘Tis the season for venturing far out on the analytical limb, throwing caution and humility to the wind and staking out a few predictions. Fully aware that any (all?) of these may come back to haunt me, I offer up the following in the spirit of provocation.
1. Everyone’s TV plans crystallize but Apple’s. While we’re almost certainly going to see a refresh of the Apple TV set-top box, the ever-elusive iTV will remain a figment of the fanboys’ dreams. Instead, it will be Amazon, Intel and Google that make the bigger moves into TV in 2014. Amazon will launch its rumored set-top box to give its Prime streaming customers an even more Amazon-centric experience on the TV. Google will unwrap its Nexus TV initiative to create a media player to compete with Roku and Apple TV (and to bury the fragmented and unsuccessful Google TV). Finally, Intel will offload its OnCue OTT solution to Verizon, who will use it to pitch mobile TV to its smartphone customers and offer more packages to FiOS subscribers.
2. 4K remains a niche keeping the global TV market soft. Ultra HD/4K will get top billing at CES 2014, but once the hoopla subsides it will become clear that, much like 2013, 4K is still very much in its infancy phase. Though prices on 4K panels will decline, the impact on shipments will be modest and the anticipated rejuvenation of the replacement cycle will be put off for another year. Meanwhile 4K content will remain sparse, despite Amazon’s well-publicized commitment to produce its slate of originals in 4K. Pay TV providers will spend more time optimizing content for the small screens (tablets, smartphones) than worrying about funneling bandwidth-intensive 4K video to home viewers.
3. Cable staunches the bleeding. 2013 was the year that cord cutting went from speculation to reality. 2014 will be the year the empire strikes back. Cable MSOs may not have a spectacular 2014 in North America, but they should be able to staunch the flow of customers to traditional and OTT rivals. They’ll rely on three prong strategy. First, releasing more content onto mobile apps so that customers have a wider access to content away from home. Second, they’ll follow Comcast’s lead and dangle a low-cost subscription TV tier that bundles HBO and broadband internet access to court the budget conscious. Finally, they’ll punish existing cord cutters with broadband caps and metered pricing on internet access.
4. Aereo is purchased or shut down. The streaming service Aereo enters 2014 faces two critical and potentially lethal challenges. The first is ongoing litigation brought against it by the broadcast industry. The company clearly wants to make its case before the Supreme Court, where it could very well lose. Even if Aereo prevails in court, it still needs to turn a profit. Hard numbers on the service are scarce: the Wall Street Journal estimated they had around 100,000 subs in New York, while the company’s CEO insisted that they only need a few hundred thousand to be profitable. That sounds… optimistic. The company has yet to prove that its service can scale into the millions, let alone attract the necessary consumers to sustain profitability. Aereo’s best hope is to survive its court challenges and then be bought out by a firm with deeper pockets and a broader TV offering than making people pay for TV they can receive for free.
5. The FCC will lose its authority to enforce net neutrality. If a ruling comes through from the U.S. Court of Appeals for the D.C. Circuit, where the issue is being litigated, it’s going to disappoint advocates of net neutrality. The Circuit Court will rule that the FCC does not have the authority to enforce net neutrality principles. This will give cable companies crucial ammo in the war on cord cutting by clearing the way to charge “tolls” to media firms who want priority access to bandwidth to improve their quality of service. It will also give incumbent pay TV providers ample room to exempt their own streaming services from bandwidth caps while ratcheting up pressure on OTT services like Netflix.
6. 3D TV makes a comeback. Just kidding! It stays dead.