Executive team from VOO, a leading Belgian telco, share their views on the role of innovation in the pay-TV industry and where that will take it.

The Pay-TV Innovation Forum is a new global research programme for senior pay-TV executives, developed by NAGRA, in partnership with leading research consultancy MTM, designed to explore and catalyse innovation across the pay-TV industry, at a time of unprecedented change.

As part of the programme, we are publishing a series of interviews with leading pay-TV industry executives from around the world to explore their views, perspectives and experiences of innovation in the pay-TV industry.

In this interview, Tamara Leemans - CTO, Frederic Campodonico - Head of Product Management TV, Cédric Couvreur - Senior Product Manager of VOO, a leading Belgian telco, share their views on the role of innovation in the pay-TV industry and where that will take it.

How would you describe the state of the pay-TV industry in Belgium today?

The pay-TV industry has always been exciting and constantly changing, because it has always faced some form of external competition. Today Netflix and other OTT players are the key challengers to the existing pay-TV model. However, at a high level the industry has always had the same challenges: retaining customers and ensuring they are willing to pay for their services. As an industry, it is used to change.

Although pay-TV and video services and consumer behaviours have evolved and some OTT and TV Everywhere services have gained popularity, we believe that the traditional pay-TV model is still strong. A lot of consumers in Belgium still want to sit back, relax and enjoy a passive pay-TV experience on their TV screen instead of pursuing a more active online or OTT video experience.

 What does innovation mean to Voo?

Innovation has always been very important to us and over the last couple of years it has become a key focus area. We are working on innovative ways to retain our customers - by improving their experience - and extend our existing footprint. Our ‘Startover’ service, allowing customers to access 7-day catch-up content from all the linear channels without recording them, is a great example of how we can utilise our telco networks to bring great functionality to our customers.

We are also trying to expand the scope of innovation. It is not only about developing new consumer products and improvements to existing offerings, but also about innovating around the business model, in areas such as pricing, targeting or even marketing.

Looking ahead, what will be the most exciting areas of opportunity for pay-TV service providers?

First of all, content is playing a much more important role in pay-TV propositions and there are a lot of innovative things pay-TV service providers can do with content. For example, they can introduce new formats such as virtual reality, play with the release windows of the exclusive content that they own, extend the lifetime of content by offering in on demand, or repackage content and build new commercial models around it.

Everyone agrees that Internet of Things and Smart Home will be big areas of opportunity, particularly for telcos. However, service providers are still searching for the right business model. The situation is similar to when back in the 2000s telcos knew that mobile data was going to be big, but had to wait for iPhone to be launched to actually see that happen. So it feels that the Internet of Things and, in particular, Smart Home solutions are waiting for their ‘iPhone moment’.

Targeted advertising is another interesting area and there is a big opportunity there. However, it could be challenging for pay-TV service providers. Advertising is a different business model from pay-TV, requiring different capabilities and relationships with advertisers that pay-TV service providers are not used to developing. Pay-TV service providers entering this business will have to work hard to figure out new business models.