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5 crucial ways the pay-TV industry can innovate to ensure long-term growth

pay-TV innovation

In today’s disrupted pay-TV landscape, consumers are demanding more for less, new entrants are flooding the market, and content investment costs continue to rise.

When you add the rapidly evolving piracy ecosystem into the mix, it’s no surprise that the pay-TV industry is facing challenging times.

According to the Pay-TV Innovation Forum’s latest findings, 84 percent of executives surveyed expect competition for all paid-video services to increase dramatically over the next five years.

But there’s light at the end of the tunnel – and the answer lies with innovation. Participants identified five key areas ripe for innovation that could help the industry remain competitive and grow in the years to come:

1. Continued investment in next-generation pay-TV services

Over half of pay-TV providers have already improved their portfolios in the past twelve months with a focus on developing their core propositions and next-generation set-top boxes that can support advanced functionality. This includes third-party apps, personalised recommendations and access to 4K content.

Such investments must continue to ensure they meet the needs of consumers. Telecoms and cable providers are well placed to deliver such innovations as they already have the necessary infrastructures in place to easily launch services.

2. More diverse multiscreen pay-TV propositions

89 percent of executives surveyed agreed that delivering a seamless, personalised consumer experience will be key in the future, especially in light of increased churn and cord-cutting.

This will in part be driven by catering to changing customer groups and consumption habits. Advanced data and analytics meanwhile will increasingly help pay-TV companies improve customer retention and reduce churn, deliver personalised experiences and relevant advertising, inform customer acquisition and new product development, as well as automating customer service and care.

3. Super-aggregation

With content now available through so many different sources globally, and content owners launching their own streaming services, disaggregation means consumers are increasingly split between sources.

This new landscape presents a huge opportunity for those service providers prepared to become super-aggregators, offering pay-TV and OTT services through a single subscription. By offering simplification in such a fragmented landscape, it’ll be an offer that consumers will find hard to turn down.

4. Converged pay-TV and OTT offerings

With such potential for super-aggregators, it’s only logical that converged offerings will lead to a platform-agnostic model, evolving away from traditional pay-TV versus OTT. Instead we’ll see a transition into a paid-for-video market where the content source is fundamentally irrelevant to the consumer.

Similarly, we’ll see a move beyond the owned set-top box. With content now available through a gamut of sources, there’s a growing need to move away from the traditional value proposition. Pay-TV executives recognise this, and believe network infrastructure and billing relationships, rather than proprietary STBs, are now the gateway into consumers’ lives.

5. Diversification and connectivity

Adjacent services – including mobile and fixed-line connectivity – present real opportunities for the industry, creating a means to become more embedded within consumers’ mindsets. Smart home and advanced advertising solutions have particular potential, with respectively 41 and 36 percent of executives already recognising these areas as strategically important.

 

There’s no denying the global pay-TV industry faces challenges ahead. But with the latest Pay-TV Innovation Forum insights in mind, it looks as though we’re at a turning point.

And while the industry recognises significant global pressures, steps are already being taken to ensure it remains competitively viable to secure its long-term future and opportunities for growth remain.

Download the full 2018 Pay-TV Innovation Forum report and stay tuned for news and updates on the 2019 edition of the programme, which will examine the key challenges and opportunities facing pay-TV providers and content owners around the world in today’s new OTT economy.