This week’s news is framed by research showing that pay-TV penetration continues to drop quarter-over-quarter with the 13 largest multichannel video providers in the U.S. -- representing about 94 percent of the market and losing about 105,000 net video subscribers in 2013. That small overall total belies the deeper story however: Leichtman Research Group has found that the cable sector is responsible for most of that fall-off: the top nine cable companies lost about 1.74 million video subscribers in 2013 -- compared to a loss of about 1.41 million subscribers in 2012. Comcast (News - Alert) and Time Warner Cable alone lost a combined 1.1 million video subscribers. Comcast finished 2013 with 21.7 million on the rolls, down 305,000.

And meanwhile, the overall set-top box (STB) market declined in 2013, down by 10 percent from last year. But, video gateways that offer subscription pay-TV as well as hybrid, IP-delivered services saw double and triple digit growth rates across metrics, according to Infonetics (News - Alert). The news is good for operators, as they look to cut deployment costs. Video gateways collapse the STB and broadband CPE into a single device, and it's for this reason we expect to see a long-term shift to these devices, at least in North America, to reduce capex in multiple TV set home. Infonetics also found in its latest analysis that the use of over-the-top (OTT) media servers is growing, which isn’t surprising given the thirst for consumer multiscreen use in the home. However, service providers delivering pay-TV services as an app over a broadband connection are another market segment that is fostering growth; hybrid IPTV services are an expanding piece of the pie.

Operators should take note, particularly when it comes to multiscreen: Ericsson (News - Alert) has predicted that there will be 50 billion connected devices by 2020, 15 billion of which will be video-enabled. The proliferation of these devices, combined with consumer willingness to pay for high quality, premium content, is resulting in a new age of anywhere, anytime access to content. In the U.S. it’s called TV Everywhere; in Europe it’s known as TV Anywhere. But operators are facing challenges when it comes to being able to deliver on the promise. Ericsson is trying to tackle the issue for them with the launch of Ericsson Virtualized Encoding, a unified software solution designed for intelligently allocating resources and simplifying the process of selecting the right encoding method and platform based on the operator's priorities for deployment speed, video quality and output.

Ericsson isn’t the only one working on tools for the digital age. The gap between television and computers has been closing with the popularization of smart TVs. These devices are TVs and top boxes with the ability to connect to the internet and integrate Web 2.0 features. Like smartphones and tablets, or the new Windows 8, smart TVs feature the ability to use apps. Many of these apps allow different types of streaming services, perfect for use on a TV. Working on developing high quality apps, TV App Agency has been a leading developer of apps for Smart TVs since the company got its start in 2011. It’s now partnering with Nice People At Work to incorporate up to date information regarding user details and video performance into its application development platforms.

Consumers however expect a consistent quality of service regardless of the screen. And this is where operators can shine. A survey from Parks Research has found that consumers expect the same TV user experience throughout their home, regardless of whether the service is offered over the top (OTT), a managed terrestrial operator network, satellite or other delivery mechanism. Expectations also remain the same regardless of the receiving device, including set-top box or connected CE device. The connected home research further found that users want all of the bells and whistles of a traditional pay-TV service within the user interface for OTT. "While some operators might see OTT delivery or use on a connected CE device as a way to offer a slimmed-down version of their user interface, consumers still expect the full-feature service and interface experience regardless of how it is delivered to the TV," said Brett Sappington, director of research at Parks Associates (News - Alert).

Europe is a different story for cable however. TiVo has announced that its subscriber base has increased to more than 2.5 million across Europe and has further helped to establish the company’s emergence as a strong multi-national television platform and associated service provider. The significant increase in the subscriber base was triggered by the adoption of the advanced TiVo experience by the consumers in the UK, Sweden, and Spain via a growing roster of international pay-TV operator partners including Com Hem, Virgin Media (News - Alert) and ONO. TiVo now covers around 50 percent of the subscribers at Virgin Media and around 30 percent of the subscribers at ONO.

Satellite in the U.S. is doing well, thanks to advances in the consumer experience. To that end, DISH Network has launched Super Joey, an add-on solution to its highly popular Hopper Whole-home HD DVR platform to increase the tuner capacity of Hopper experience. The Super Joey solution adds two network tuners in addition to the three existing tuners, which allows subscribers to simultaneously record as many as eight shows. The new add-on nearly eliminates any unwanted channel conflicts faced by subscribers of DISH Hopper. The Hooper platform enhanced with Super Joey solution will enable DISH subscribers to watch as well as record television shows from four channels of their choice while also recording shows from the big four broadcast networks. Alternatively, the subscribers can watch and record shows from any five channels of their choice.

OTT continues to be a force nonetheless, worldwide. SMiT for instance has announced the joint launch of a new Merged Television System with IQiYi and TCL. China-based IQiYi is a large online video operator and TCL is a recognized smart television manufacturer. Together the three companies have designed a solution with integrated high-end internet videos, interactive watching experience and live high-definition cable programs. Hongyu Shuai, president of SMiT, said, "Our accumulated experience in the broadcasting and television industry enables us to manage the integration of internet video services into high-definition live cable programs, which improves users' images of smart digital lives. Besides, the system is open-ended, which means it is applicable for all kinds of smart television terminals and set-top boxes."

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