ABI: 2020 Will Be the Year of Direct-to-Consumer Video, Not 8K TV

With the pending arrival of NBC Universal’s Peacock streaming service and WarnerMedia’s HBO Max, 2020 represents a major step toward an over-the-top video future where more content goes direct-to-consumer, reaching 900 million subscriptions worldwide, according to new data from ABI Research.

The research firm contends more consumers will be moving away from the traditional pay-TV bundle, while content access becomes more fragmented and consumers are presented with a growing list of distribution options.

“The ability to pick and choose which channels of content best fit [one’s] needs will only become increasingly more important,” Michael Inouye, video and cloud services principal analyst, said in a statement.

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The growing penchant among content owners to DTC is creating a more challenging market for “virtual multichannel video programming distributors” (vMVPDs). As a result, ABI said subscriber bases in some of the services have slowed, if not declined. The arrival of more DTC services in 2020 will further fragment the content landscape, making it an increasingly crowded space as more services vie for consumers’ content budgets.

Separately, the firm says rollout of next-generation 5G networks will accelerate. Analyst Khin Sandi Lynn said implementation of 5G fixed wireless access (FWA) will be great news for consumers. 5G FWA garners high interest from operators to replace last-mile fiber connectivity for residential broadband services.

“This allows greater service coverage and improved network delivery for customers served,” Lynn said.

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While there are still barriers to adoption, similar to traditional 5G (infrastructure is expensive and time-consuming to scale), many other operators and equipment vendors have already been trialing 5G FWA deployment across different regions, according to Lynn.

“Qualcomm’s recent announcement of 5G FWA partnerships, with more than 30 OEMs and ongoing spectrum acquisitions by operators indicates that the ecosystem is getting ready to speed up the rate of deployment,” she adds.

Meanwhile, Lynn said 8K rollout will remain largely industry hype.

“Announcements of 8K televisions by major vendors earlier in 2019 attracted much attention and raised many of questions within the industry,” Lynn said. “The fact is, 8K content is not available and the price of 8K TV sets are exorbitant. The transition from high definition to 4K will continue in 2020 with very limited 8K shipments — less than 1 million worldwide.”

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