How Pay TV Lite services could become OTT giants

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    ‘Pay TV Lite’ OTT services from traditional platform operators like Viasat, with its standalone subscription for on-demand content using Viaplay, and BSkyB, with its NOW TV brand, take on new significance when viewed in the context of a possible migration from broadcast delivery to streaming. As we have reported previously, it might be economic to migrate smaller SD channels from broadcast spectrum to OTT-only in the next decade but only if they can achieve the same audience reach as an online entity.

    IHS Screen Digest has therefore identified the need for consumer-facing OTT platforms with significant reach that can act as the primary means of television delivery in the majority of homes that they touch. The analyst firm views this as a prerequisite for broadcast-to-OTT channel migration. This is where the Pay TV Lite services come in.

    These innovative offers give non-Pay TV customers the chance to buy premium content using online video delivered to various connected devices including the Xbox games console and are a good example of how Pay TV can be more ambitious with OTT. NOW TV is probably the best example of this new service category, giving otherwise free-to-air consumers the chance to rent movies or subscribe to linear movie channels, with sports and general entertainment channels to follow. NOW TV always looked like more than a counter-offensive against Netflix and Guy Bisson, Research Director for Television at IHS Screen Digest, thinks this is BSkyB’s future-facing platform for if the world does go OTT.

    “That is absolutely what this is. They see the way the world might move in ten or so years. It is a marker in the sand; they are hedging their bets,” he told Videonet recently in our new report, The Hybrid Platform Operator.

    Bisson highlights Viaplay and also the Horizon platform from Liberty Global as similar starting points for a potential migration towards more OTT. “All operators are looking at this approach but today it is more as a supplement to their core offer. We are not talking about a switch for up to ten years,” he comments.

    Pay TV Lite services could become the consumer-facing OTT platforms with significant reach that IHS Screen Digest refers to in its research, which also talked about YouView and BT Vision as having the potential to fulfil that big OTT platform role. “Pay TV has set out its stall for an OTT future. This is a fundamental trend,” Bisson declares.

    When NOW TV launched in the UK, Ed Barton, Director Digital Media Strategies, Digital Consumer Practice at the research and consulting firm Strategy Analytics, said it was a way to target multi-screen devices that would otherwise erode Sky’s audience share. He also viewed the service as a way to extend reach into the free-to-air market at a time when growth in the core Pay TV business was slowing, and the means for Sky to defend itself against services like Netflix and LOVEFiLM. He also highlighted the possibility of shifting some of the people who watch illegal sports streams into paying customers.

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    RGB Networks, which supports various multi-screen and OTT services worldwide with its transcoding and adaptive bit rate packaging solutions, has been talking to U.S. cable operators who view the Pay TV Lite model as a way to win back subscribers they already lost to cord cutting. The plan is to tempt them back with a subset of the content you get on their traditional package, then try to upsell them. For that reason, and because they do not want to upset the cooperative relations with other cable operators, these services will be limited to cable operator geographic footprints and not launched nationally.

    Ed Barton thinks we will see more of the Pay TV Lite type of service. “Standalone OTT Pay TV services are a very interesting development. I expect to see them proliferate over the next few years as competition intensifies for the diminishing number of households who are not already taking some kind of Pay TV service.”

    He has also concluded that all-OTT distribution is nowhere near being viable today. In fact, rather than broadcast channels moving online-only, he thinks it is the ambition of OTT-only channels to get onto broadcast spectrum.

    “I suspect the online environment will continue to be a vibrant, dynamic seeding ground for content creators who will be sustainable at much lower levels than conventional broadcast TV channels. But for the time being, popular online ‘channels’ will graduate to broadcast when they become popular enough,” he predicts. “This includes the YouTube ‘channels’, many of whom would love to get a berth on broadcast TV.”


    More on this subject

    If you are interested in Pay TV Lite, the role of OTT in Pay TV, the broadcast vs streaming debate and the emergence of the ‘Hybrid Platform Operator’ that harnesses broadcast and online delivery as required, check out Videonet’s latest report, which covers these themes and much more. Full details are below but you can read/download the free report here.


    The Hybrid Platform Operator: New Videonet report (free)

    In the connected, multi-screen era, Pay TV operators are using broadcast TV, managed IP and OTT to deliver more of the content we want, where we want it. This report looks at the market implications of the hybrid platform operator and considers the challenges in creating what should be a unified service through multiple networks and devices. Issues addressed include matching broadcast QoE on streaming services, the user experience, integrating OTT into the STB offering, the role of adaptive bit rate STBs, and streaming versus broadcast. The report includes original input from Com Hem, Virgin Media, PCCW-HKT, Ziggo, TiVo, Strategy Analytics, Verimatrix, RGB Networks, Alcatel-Lucent, IHS (IMS Research), Ericsson, Broadpeak and IHS Screen Digest.Read/download the report here.

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