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OTT: The Challenges and Opportunities in Pay-TV

Simon Trudelle, Senior Director, Product Marketing, NAGRA

In late 2017, in partnership with analyst firm Ampere Analysis, NAGRA released the TV Tribes research report that examined the changing consumer consumption habits within pay-TV. The study revealed how operators can attract and retain different consumer types to unlock new revenue opportunities. One of the strategies that emerged was the opportunity for pay-TV providers to fully embrace and develop their OTT offerings.

Of course, when developing such solutions or entering a new market, there will be challenges to face to leverage those opportunities and reach new audiences. At our annual Pay-TV Innovation Forum, the topic of OTT services was a key area of discussion among industry experts. We spoke with some of them to get their views.

Alexander Sacher, CTO, HD PLUS said: “Today, most traditional pay-TV providers have all the assets, skills, and capabilities required to provide OTT streaming services. However, the key question they have to answer is whether they will be able to compete against the major global internet players like Amazon, Google and YouTube, Apple, and Netflix in their region or territory.”

When embracing OTT, pay-TV providers will have to recognise the fundamental changes within business operations to achieve this efficiently, this process will be key in breaking into a new market and enabling a traditional pay-TV provider to compete against OTT giants in the market.

Mike Kerr, Managing Director, Asia, beIN Asia Pacific commented: “Pay-TV providers are in a more challenging position than content providers [to adapt to OTT and mobile] and they will have to adapt their business models. They will have to take advantage of new technology and hopefully will be able to reach a broader consumer base beyond their current infrastructure.”

But for Sacher, OTT services form only part of a wider content offering that providers should be aiming for. He summarises: “To succeed, pay-TV providers will have to deliver an integrated and seamless user experience across a variety of consumer devices, combined with a rich content offering that encompasses traditional linear TV, on-demand content and YouTube-style short-form video clips. However, pay-TV operators will not be able to deliver this on their own and will have to embrace close partnerships with content providers.”

There are many opportunities and challenges in pay-TV providers incorporating OTT into their service offering, but they need to be smart when considering their options. They must create a tailored solution that works for them and their subscribers, addressing the needs of new emerging customer tribes. However, they cannot compromise the quality of their current service and they shouldn’t necessarily seek to beat the established OTT SVOD services at their own game for every market segment.

Instead, they should find smart ways to use flexible multi-network and multiscreen technology, leverage data analytics and apply different business models to cater to the constantly evolving consumer expectations. In the end, OTT is just a means to deliver more value to consumers.