Regarding alternative technologies for the U.S. like terrestrial video, there are certainly better options in Europe, but I think that is changing. From the newly available digital spectrum for ATSC based digital video delivery, to innovative terrestrial video efforts from the likes of Sezmi, terrestrial is changing here as well.

This doesn’t even consider the fact you can do a well-done over-the-top video service today (anyone who uses Netflix Watch Instantly or who has connected Hulu to their TV can attest to that).

It is interesting that Qwest is considering an OTT option. If you look at Qwest’s history, back when they were US West, they rolled out one of the nation’s first video over DSL offerings in the Phoenix market. Then they got acquired by Qwest, fired the CEO evangelizing these forward leaning efforts in Sol Trujillo, and sold off all their valuable assets (like their wireless unit). Now look where they are….

Outside of the U.S., it depends on the country. But Western European consumers have a much larger choice of free to air channels — hence the low penetration of PayTV services. Just look into the finances of cable operators in Europe, and you’ll see a wholly different picture than what we see in the U.S.

Simply mentioning a couple of European operators doesn’t resolve the underlying question of whether OTT services will get consumers to pay..or why telecoms operators will sell the bundle.

Judging from the results for Telecom Italia and BT, PayTV bundles (regardless of how they’re delivered) have been a difficult sale in markets where people aren’t used to paying for television. And in markets where there are accustomed to PayTV services, it will take many years of double-digit growth (again, regardless of how the service is delivered), for telcos to reach well into the single digit percentages of households.