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The battle between traditional linear TV services and streaming media devices heats up

When watching television and reviewing your on-screen guide, do you ever wish that your cable TV shows were integrated with your other streaming services, such as Netflix, Hulu and Amazon Prime? Wouldn’t TV viewing be simpler if you could scroll through your guide and see all your cable shows and the last episode of Stranger Things that you didn’t finish on Netflix, as well as the new movies available this week on HBO Go? What if there was no more need to switch between different services, devices or even remotes because everything appeared as if it were on the same viewing platform?

With U.S. adults spending nearly 4.5 hours in front of a television daily, it comes as no surprise that TV viewers are constantly looking for more convenient and intuitive methods of accessing their content. With this search for convenience, more and more consumers are becoming the victims of “fragmentation frustration” – the state of being constantly annoyed by having to find remotes, switch devices, and recall which streaming service has the content they seek.

What consumers want is a centralized hub that seamlessly presents content choices, incorporating all their services and devices. These consumer demands have instigated the latest battle-front in the video service industry: The Hub War.

Competition to be “the hub” is heating up, but what does that mean for the industry? The hub will ultimately be an integrated solution that provides consumers the intuitive and seamless ability to consume both their linear TV content and their unscheduled video content, such as Netflix and Hulu, on the same platform. This “hub” could include other features such as billing, search, and discovery.

Looking at the future of video services, who will win the ‘Hub War’?

The Contenders

  1. In one corner, we have the traditional linear TV services – cable companies and satellite services, such as DirectTV, Charter, and Comcast.
  2. In the other corner, are the streaming media devices, such as Roku, Amazon FireTV, AppleTV, and Chromecast.

The linear service providers have long utilized on-screen guides to list available ‘live’ linear programming and have even integrated some VOD content teasers. Recognizing that consumers have multiple streaming service subscriptions and streaming will continue to be a desirable consumer outlet for content, the linear providers are seeking further integration of third-party streaming services into their guides. Several already make Netflix, Prime, Hulu, and a host of low-cost/free platforms available through “apps” or similar menu options. The process isn’t as seamless or integrated as consumers want it to be yet, but it is evolving in the right direction.

Meanwhile, device companies are seeking to make either their own content and/or the maximum array of video streaming services available. Front and center, and leading the pack, is Roku. It will be challenging for another platform to overtake their position in the near term. They currently offer devices that provide access to content from services with the highest consumer demand. As long as Roku can distribute new high-consumer-demand services, they will likely maintain their first-mover position among device entries.

Chromecast is another device that is well-positioned to enable new content services access to tens of millions of consumer households, but – without a menu system – it is not intuitive and doesn’t easily integrate with other smart-TV functions.

The winner of the device war, as the “hub” through which consumers typically engage with their content, is likely to be the service that is first to integrate with linear services and content from streaming services. With  more than 30 million users, Roku is probably best positioned to meet this challenge due to its heavy market penetration and ability to offer content from the services with the highest consumer demand.  However, Roku could be at risk if one of two events occur.

  • If a linear provider successfully creates a seamless way to integrate content from streaming services with their own on-screen guide, they could present a formidable challenge for Roku.
  • If Roku is unable to secure integration with a disruptive new video streaming service, it’s chances for success will be diminished. This is unlikely since Roku is currently the easiest, and most intuitive, go-to-market option in the TV-based, streaming service category.

Despite the potential obstacles that Roku faces, if I had to place my bets… I would bet on Roku to continue to lead as the device of choice, – “the hub” – over the next 2-3 years. However, it is also possible that the manner in which consumers choose to access content may evolve or be completely disrupted by new technology, services, or entrants.

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