Almost all homes will have access to connected TV's by 2020. Connectivity transforms FTA TV allowing consumers to benefit from catch up TV, multiscreen, access to additional pay TV services & a multiplication of choice, undermining the need for a pay TV subscription. OTT services such as Netflix & AMAZON benefit from a virtuous circle of growing reach, subscriber & revenue growth which in turn allows increased investment in content, the cost of which they can spread over tens of millions of English speaking customers worldwide.
We believe AMAZON to be the most disruptive force (to retailers) in media given it offers content for free to drive wider objectives. Over time, AMZN & You Tube (Red) will become closer substitutes for Sky, offering not only on demand content but also subscription adds-ons - allowing content owners & channels to benefit from their distribution & billing, & customers to build their own a la carte bundles
