With 2018 winding down, here are five technology forecasts that will impact the cable industry, along with the broader media and telecom industries, in 2019.
1. Netflix is in for a bad year. Netflix has long been preparing for the day when key programming suppliers such as WarnerMedia and The Walt Disney Co. build their own streaming platforms and no longer license its content. That is, of course, what its multibillion-dollar investment in original shows has all been about.
That strategy is about to be put to the test.
WarnerMedia CEO John Stankey suggested to analysts earlier this month that Netflix’s library will “thin out” as WarnerMedia and Disney launch their platforms next year, and that can’t be good news. According to a study just published by Parrot Analytics and Kagan, Netflix originals still don’t even generate half of the platform’s total viewing.
“Netflix has been great at developing a lot of content, but what it hasn’t been great at is the traditional, Hollywood style of marketing and creating enough buzz around shows,” Omar Akhtar, an analyst for the San Francisco-based Altimeter Group, told Yahoo Finance earlier this year. “That’s not where their budgets lie. They’d rather spend on great content.”
2. A major virtual multichannel video programming distributor will go away. Virtual pay TV services ended 2017 on a tear, with leaders Sling TV and DirecTV Now adding 711,000 and 888,000 users last year, respectively.
But the market is too crowded. Rising program costs are driving up monthly bills and squeezing margins, which are already too tight.
Growth has ground to a halt. In fact, AT&T recently announced that it is raising prices on DirecTV Now and cutting back on programming.
Though he was careful not to lump his startup in with struggling corporately backed competitors, fuboTV co-founder and CEO David Gandler told Multichannel News that at least one vMVPD could fold it up in 2019.
“If you can’t figure out how to make money on this, why would you do it?” Gandler said. “I think you’re going to see people saying, ‘Either I missed something, or we’re not executing.’ I would anticipate that there will be companies that will have to rethink their strategy.”
3. 5G will move beyond mere hype. While 2018 has been festooned with plenty of 5G hype (see Cover Story), we’re set to see plenty of real-world deployment in 2019.
According to Deloitte, more than 1 million 5G handsets and another 1 million 5G modems will be sold next year.
“It won’t happen overnight, but 5G will profoundly change our interactions and experiences, which is good news for consumers as they demand better performance and more access to content,” Deloitte analyst Kevin Westcott said.
4. Cable will begin to commercially deploy Full Duplex DOCSIS. With the fresh cycle of 5G hype spurring discussions about speeds in excess of 1 Gigabit per second, cable will respond with its own next-generation network technology standard, Full Duplex DOCSIS.
CableLabs, which led development of FDX, believes the technology could be used to deliver 10 Gbps speeds, both upstream and downstream, in the next few years.
For its part, Arris expects to start commercial deployment of Full Duplex hardware and software toward the end of 2019.
5. The pay TV set-top business is in for major changes. Roiled by cord-cutting and a move to cloud-based video systems that favor thin-client customer premises equipment, the pay TV set-top business is on the ropes. By this time next year, all or most of the major current vendors could be sold.
Last month, Technicolor SA, which paid $2.1 billion in 2015 for the Cisco Systems set-top unit, said it is in preliminary talks to sell all or part of itself. Not only has Technicolor’s pay TV operator client base consolidated, it’s also grappling with the global shortage of critical electronic parts, most notably multilayer ceramic capacitors.
Meanwhile, CommScope, which is in the process of buying No. 1 set-top vendor Arris, said recently that it’s still trying to figure out what to do with “one of the more maligned” elements of Arris’s portfolio.
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Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!