Subscribers don’t save enough by replacing pay-TV subscription swith over-the-top services to justify the loss of available content, according to Barclays media analyst Anthony DiClemente, commenting on US start-up Aereo.

DiClemente isn’t a fan of Aereo, the cloud-based programming service backed by Barry Diller, which seeks to stream broadcast TV channels with a DVR interface to tablets, notebooks and over-the-top boxes for $12 a month.

If Aereo survives its court battle with the networks, DiClemente concludes it’ll find itself positioned as merely “one more over-the-top distributor” in a segment he feels has limited long-term consumer appeal. “In our view, dropping cable TV in favour of a bunch of over-the-top alternatives may not result in as much incremental savings as one might initially think.”

He explains broadband Internet is more expensive as a standalone service. DiClement’s example: if you drop a $60 video service from a $90 pay TV subscription, the Internet portion is likely to increase from $30 to $50 a month, negating a third of the savings. The net price of your video ends up being only $40.

Putting together an over-the-top programming package that would include Aereo for broadcast channels ($12 a month), a subscription VoD service like Netflix ($8) and a few movie purchases from a retailer like iTunes (he estimates $10 a month), DiClemente says the combined monthly price of $30 a month doesn’t compare favourably to the net price of $40 a month for pay TV.

Other posts by :

1. Rocket Lab confirms D2C ambitions
2. Turkey establishes satellite production ecosystem
3. Italy joins Germany in IRIS2 alternate thoughts
4. Kazakhstan to create museum at Yuri Gagarin launch site
5. AST SpaceMobile gets $42 or $1500 price target
6. Analyst: GEO bloodbath taking place
7. SES AGM results: Appaloosa still objecting
8. SpaceX’s Shotwell worth $1.2bn
9. SpinLaunch’s revolutionary plan for 280 satellites

Categories: Articles, Broadcast, Markets, OTT, OTT, Pay TV, Research