Traditional to Next-Generation Platform
Pay TV industry
made a success story with a growing range of services worldwide. The industry invested
actively in infrastructure, innovative products and modern technology to
deliver amazing entertainment and communications experience to customers.
However, today the Pay-TV industry is experiencing a period of disruption as
service providers face sluggish growth and challenges from new business models
which is intensifying the competition. Despite low subscriber growth,
executives expect competition to level-up intensely in the coming five years.
challenges impacting the Pay TV industry are:
ecosystem: The increasing affinity towards OTT (Over-The-Top) services,
along with huge investments in content and technology is giving a great
competition. OTT being internet-based model presents cordless on-demand
channels with multiscreen viewing, making big waves of on-the-go entertainment.
Experience: Consumers prefer great flexibility in making their own channel
packs, and viewing time, which further can be analyzed by digital systems for
providing a personalized experience with relevant suggestions.
piracy: The Pay-TV piracy results in very huge unrealized revenues of
operators, resulting in increased investment in products and anti-piracy
measures to prevent unauthorized access and block illegal competitors from the
market. The service providers has to rely on regulations and legal framework,
external anti-piracy services, and run monitoring services, among others.
In order to
respond to these challenges, the Pay-TV industry need to come up with an innovative
business model while retaining a profitable core business. The industry has
started finding solutions for innovative Product offerings with next-generation
connected and interactive technologies, along with online services. Also, the
service providers are focusing on crafting unique pricing and packaging, based
on varied consumer segments, and establishing relations with content providers.
potential vary significantly among the providers, from region-to-region. It has
been observed that innovation capabilities are much ahead in North America
compared to rest of the world. Industry need to identify the gap between
leaders and stragglers; and in the scenario where least innovative provider can
match the average innovator, we can expect a noticeable improvement in the
global industry revenue. The pay-tv market is highly fragmented in EMEA and APAC,
thus, holding the biggest improvement potential in these regions.
Some of the
providers have advanced their product offerings by providing innovative
features on Set-Top-Box (STB), like the inclusion of 4K videos, IP Connectivity and
integration of third-party applications such as Netflix, Amazon Prime videos,
and YouTube, etc. In the US about 12 Pay-TV service providers offers the
Netflix service in their STB, such as Comcast offers Netflix into its Xfinity
X1 STB. In the Netherlands and Switzerland, UPC integrates the Netflix application
on its Horizon STB. In September 2017, Netflix and the Orange Group renewed
their service distribution contract to extend this agreement to all the
countries where Orange is operating.
providers need to focus on following strategies to sustain in the market,
Partner with content and technology providers to
better analyze the consumer need, and formulate offerings.
Develop some mutation in products and services
to stand at par with OTT and alike services.
Investing in Internet TV and cloud services for
time-friendly viewing could be a great leapfrog.