By Simon Trudelle, Senior Director, Product Marketing, NAGRA
In recent years, the pay-TV market has faced unprecedented change. The rise of OTT TV, shifting viewing patterns and the proliferation of cloud technologies have given rise to significant challenges. The TV industry is now witnessing the biggest shift in media habits since the dawn of television. But this also presents a real opportunity for pay-TV providers to build more innovative and sustainable business models for the future.
The widespread availability of high-speed Internet has transformed the entertainment industry. Consumers today want cheaper access to content and, with fewer initial investment costs, OTT services are now better placed to charge lower fees. And with growing demand for personalization and flexibility in everything from mobile phone contracts to pay-TV subscriptions, services that bypass the traditional provider can give the consumer access to a wide range of content without tying them to an expensive all-encompassing package.
Catch-up services set new viewing records every month while paid streaming services like Netflix are booming. According to a report by Ovum, OTT TV will reach 177 million households by 2019. This shift to streaming services has been accelerated by the growth of video streaming as well as the increasingly large, high-quality screens available on smart devices. The likes of Roku, Apple TV and Amazon Fire TV let viewers bundle their own streaming services in one place, including direct-to-consumer content from networks such as HBO, Disney and MLB.
Industry shifts have made it increasingly challenging for pay-TV providers to be a one-stop shop for TV services. Content owners can now go direct to the consumer while OTT service providers like Netflix and Amazon have started commissioning their own original programming. Pay-TV providers therefore face a strategic dilemma. On one hand, they want to cut costs while on the other, they have to stay competitive by continuing to innovate and investing in new content.
The changing market is forcing pay-TV companies to innovate. And, with remarkable resilience, providers have responded with a host of new offerings, including multiscreen TV, more advanced set-top boxes, and novel pricing and packaging deals. But some big questions remain: how does pay-TV as a whole continue to grow? What are the best strategies for success? And what will the next five years of innovation look like?
To find out, NAGRA has committed resources to a research programme studying the major growth and innovation opportunities in the pay-TV industry. In partnership with TV research consultancy, MTM, NAGRAâ€™s Pay-TV Innovation Forum will carry out interviews and committee discussions with industry leaders around the world.
Investigating the impact of emerging markets, digital technologies and new revenue models on the pay-TV ecosystem, it will also evaluate the status of the latest pay-TV trends and initiatives. The research will be shared with the industry through a white paper and a series of webinars.
The industry has reached a turning point and both operators and customers want as much information as possible about whatâ€™s coming next. The Forum will aim to educate stakeholders on the best strategies to grow and stay profitable through to 2020 and beyond.