With the backdrop of a significant rise in streaming OTT video services, the latest episode of The Business of OTT, with Chris Linden and Chris Tripp, looks at the implications for operators in North America, and answers the killer questions - is pay TV as we know it today dead? Or can pay TV operators flatten the cord cutting curve?
Chris Tripp makes the following observations about OTT in North America and how the pay TV operators are having to create an ecosystem that can adapt and evolve at Internet speed:
- What has changed over the last 12-18 months, is the pace at which programmers are moving content to OTT applications. Programmers want to control the user experience and how content is presented to consumers. As this happens, Pay TV operators need to accelerate plans to offer OTT applications in order to remain competitive and to flatten the curve of cord cutting. If they can figure this out, they'll have a unique opportunity of providing both a simple and stable solution for customers to consume both OTT applications and live linear TV.
- To do this, the core decision for operators is how they are going to onboard these applications that are authored and operate at the pace of the Internet - they're updated frequently sometimes 50 to 60 times a year. The challenge for operators is to figure out how they can support an ecosystem that evolves at the speed of the Internet.
- Many of the common solutions are either on-box solutions doing native ports of an application or finding an on box native solution where the applications reside within the set-top box. And then there's the cloud based solutions. What's important for operators is how many of the top tier applications are available, easily deployable and easy to update in these solutions.
When considering the OTT VOD services they need to offer, operators are looking not just at the established SVOD players, such as Netflix, but also the fast growing AVOD market. Tripp likens this to a hierarchy of needs based on the demographics of cable subscribers for example. The majority fall into an age category (30-36 and above) for whom SVOD is a critical service offering, whereas the 18-30 year old group tend to be more interested in AVOD. To broaden their subscriber base and slow the pace of cord cutting integrating AVOD is becoming critically important for operators.
In his final question to his colleague, Chris Linden shifted focus to the long term and asked if pay TV, as we know it today, is dead?
“No, I don’t think so at all,” replied Chris Tripp, as he acknowledged a large community in North America that watches live TV every day. But he was also quick to point out that to remain competitive operators must figure out a way to merge the live linear customer base that they support today and the next generation of viewers by offering a seamless solution that merges both ecosystems. He concludes: “As we look at 2021 - 2022 and beyond, merging the two ecosystems through federated search and recommendations, is really important.” The opportunity that OTT applications and big data provides will play a key role in staying competitive going forward.
Watch the complete discussion here