Data included in the FCC’s latest annual report on the state of video competition depict continuing gains for over-the-top online video distribution (OVD) services, which, in turn, are fueling demand for higher broadband network speeds needed to support both high quality video and subscriber preferences for simultaneously viewing online video streams on multiple devices within a single household.
Issued last week by the FCC’s Media Bureau, the agency’s 18th annual report on the Status of Competition in the Market for the Delivery of Video Programming repeats the trend of previous reports over the past few years in declining to state whether the U.S. video marketplace is competitive. Compiled from statistics which cover the 2015 calendar year, the report states that total subscribership to U.S. cable, satellite and other MVPD services fell by 1.1 million during 2015, marking the third consecutive year of MVPD subscriber losses. Between 2014 and 2015, the cable industry’s share of the MVPD market declined slightly from 53.4% to 53.1%, while direct broadcast satellite’s share of that same market fell from 33.3% to 33.2%. Telco MVPDs, meanwhile, posted a slight uptick in MVPD market share, from 12.9% to 13.4%. Despite overall subscriber losses, the national MVPD industry recorded gains in revenue from $112.7 billion in 2014 to $115.6 billion in 2015, although rising program costs contributed to a drop (15% to 10%) in MVPD video service margins during the same period.
Meanwhile, statistics supplied to the FCC by Sandvine indicate that, in December 2015, streaming video and audio traffic accounted for more than 70% of North American Internet traffic during peak evening hours on wireline networks. Asserting that “households seeking to view multiple streaming programs on multiple devices at the same time require higher Internet speeds, relative to those seeking to stream a single program on a single device,” the report affirms that wireline Internet service providers have begun to assist subscribers in that regard “by recommending specific Internet speed packages for specific uses, such as video streaming, online gaming and number of Internet connected devices.” In a sign that MVPDs are seizing upon this trend, the report further states that MVPDs “have extended the availability of some of their programming to online video platforms similar to those offered by OVDs . . . which allow MVPD subscribers to access programming on Internet connected devices.”