Through our ongoing work with cable operators and programmers on initiatives that range from technical infrastructure evolution to business strategy, IBB Consulting has identified five key trends that will collectively drive the video delivery industry.

Over the next five years, there will be challenges and opportunities that span technological updates, deployment of new services, shifts in the marketplace and the ability to adapt to consumer behaviors.

1.  The Migration to IP
Cable operators will make the transition from QAM video transmission to an all-IP infrastructure - some already have efforts underway. The delivery of video to and from the home will drive the transition and allow operators to offer enhanced user experiences.

The switch to an IP based user experience is already much farther along than delivery of video over IP to the primary screen even on leased CPE. We believe that all tier one and two operators will deliver some IP-delivered video to TVs, while some will eventually run 100% IP-based systems. VOD, and to a lesser extent network DVR (nDVR), will see a shift to IP sooner than linear video. We expect live TV over TV Everywhere to grow, and providers will need to be sensitive toward introducing latency into linear programming, especially with time-sensitive live content.

From the customer perspective, this trend puts facilities-based operators closer to functional parity with OTT in enabling interactive and rich customer experiences. At the same time, operators will realize multiple layers of technological and operating efficiencies through network efficiency and reduced CPE costs.

2.  Media Consumed Over-the-Top
OTT providers like Netflix and Amazon are finding rewarding categories by serving a library of movies and TV shows. The cable industry's TV Everywhere initiative will play a key role in competitive positioning and subscriber retention. Widespread consumption of video on secondary devices will be driven by OTT providers, TV Everywhere, DVR content and categories such as sports programming. When it comes to larger screens, we expect to see widespread deployment of 4K video, which we anticipate will be the new HD and not the old 3D.

3.  Evolution of the Broadband Network
Even with expanded fiber to the home deployments, cable's hybrid fiber-coaxial networks have the technical ability to hold their own, evolving to allow new services as technology developments support increased capacity. Converged Cable Access Platform (CCAP), deep fiber technologies and DOCSIS 3.1 which doubles cable speeds and enables expanded upstream capacity will enable cable to keep pace with fiber.  

For video providers, the question will no longer center on squeezing video but rather on thinking up ways to leverage home Internet speeds up to 1 Gbps. As internet of things, machine to machine, IP video and smart data become a bigger part everyday reality, we see cable operators continuing to benefit from the direct access to hybrid fiber-coaxial networks with new and innovative products that take advantage of higher data rates.

4.  Accelerating Digital Platform Innovation
As services move from the set-top box environment to the cloud, we'll see the virtualization of such core applications as program guides and DVR and enablement of rich audience insights platforms. The "update speed" for products will increase by orders of magnitude, creating flexibility and accelerating innovation. Underpinned by data intelligence, digital product personalization and customization, digital platforms will evolve at the speed of data. For example, at the 2013 Cable Show, Comcast shared that it had updated its Xfinity X1 service 1,200 times in the prior year.

We expect product innovation to accelerate and lead to the emergence of data-enabled ubiquitous platforms.  Enabling compelling experiences grounded in increasing use of canary deployment and A/B testing approaches will help cable compete with fast-moving competitors.

For consumers, these platforms will offer a seamlessly blended live and time-shifted experience across the living room and mobile devices. For the industry, accelerating cloud and analytics platform innovation means both increasing product competition as well as an explosion of software development that will drive labor shortages, need for scale in managing programming costs, and new monetization opportunities such as addressable, built-in interactive advertising.

5.  Consolidation
While we'll see efficiency reached through business, technology and operations, we'll also see it through the ongoing acquisition and consolidation of video operators. Scale is also achieved through wholesale arrangements that leverage an operator's investment in R&D.  As a result of these shifts, the buying power of MVPDs will increase and the new scale will give operators a competitive edge with vendors or scale to drive custom development.

These changes will not come without some growing pains. Addressing adverse customer reactions from frequent product updates, assuring continual operating efficiency (e.g., care, marketing, field ops) in light of accelerating change, addressing privacy concerns and customer awareness and control over targeting options are all likely to challenge cable companies.

Despite the challenges, IBB Consulting believes there are significant opportunities. Based on our work in this area and experience helping companies enable transformative opportunities, we believe that rapid evolution of video delivery and technical capacity will stimulate innovation.