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Netflix changed the content landscape forever – it’s time for Pay TV to take advantage

Ivan Verbesselt, NAGRA
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From its innovative recommendation algorithms to its high-quality original content, there’s surely no denying that Netflix has transformed the content landscape forever.

Its success, and subsequent ubiquity in many markets across the world, has even contributed to the ushering in of the post-OTT era – a world where the technology has permeated the mainstream TV ecosystem to the extent that we can no longer really refer to it as “over the top”.

In fact, the very notion of OTT now refers to a technology conceived to deliver media and entertainment services directly to the consumer, making a total abstraction of the broadband delivery infrastructure in between.

The truth is, Netflix has become a kind of gateway drug to more streaming – people now will take that first, then add on other services.

Of course, this isn’t to underplay the impact other players have had on shaping the current landscape. Take Roku, for example. It is already a super-aggregator in the US through the Roku channel. It’s also about to get prime subscription services added, such as Showtime and Hayu, enabling subscribers to access that content from within the Roku channel alongside the free content it already offers. Among users, Roku is lauded for its ease of use – it makes streaming from sources like Netflix plus Amazon and YouTube simpler than ever.

But that crop of disrupters was just the beginning.

Today, we face yet more streaming platforms looking to make their mark. Apple TV+ and Disney+ are the two most recent high-profile examples, promising a wealth of exclusive original content and intuitive user experiences.

Apple’s foray into OTT is an update of an existing platform alongside two new brand launches – Apple Channel and Apple TV+. This essentially creates a two-pronged approach to aggregation and direct-to-consumer services.

Apple’s move here could arguably be motivated by the fact that its device business has matured, and as a result, it’s shifting towards services. This mirrors other platform companies, such as Google and Amazon.

Meanwhile, Amazon’s strategy of developing channels is a good one; it gives it the opportunity to diversify without the direct risk of content investment – that rests on the channel partners instead.

Meanwhile, research by Pay TV analysts Ampere Analysis shows that those consumers who have made the shift to online still value studio brands. They also watch more TV in the broad sense of the word through so-called SVOD stacking, with more than half of viewers having at least one such service.

It may seem as though this vast library of stackable content platforms – increasingly packed with high-budget original content – is a golden age for the consumer. But this isn’t necessarily the case.

The fact is, the content landscape is becoming increasingly fragmented.

Content choices are endless, but to reach the shows you want to watch means weaving through a maze of menus across multiple apps and devices. And inevitably, there’s a tipping point of fragmentation for the consumer.

And while some may argue that another SVOD platform in the market will lead to Pay TV subscriber churn, it’s possible that it is, in fact, an opportunity for Pay TV service providers to claim their role as “super-aggregators” of OTT services. Essentially, they could become the central gateway to all the content consumers want and love.

Hardware could also still be an opportunity to get into the home, though not necessarily through the usual set-top-box means. Amazon Fire TV, Samsung smart TVs, and Sony and Nintendo games consoles are the most popular. But operators need to look beyond the hardware.

The next step should be to combine old and new into channel families in one super-aggregated environment.

Meanwhile, Amazon has made it easy for SVOD channel providers to gain new subscribers. That said, discovery is more difficult because its algorithms don’t promote certain content to users; not ideal when you consider that consumers demand the easiest content discovery possible.

With that in mind, Pay TV can take advantage by doing a better job of aggregation than OTT providers – not just aggregation, but super aggregation.

Still, the Pay TV industry must remember that SVOD providers and consumers of content don’t need operators to get hold of the content they want. In order to take full advantage, Pay TV operators need to justify to them why they’re worthwhile getting hold of in the first place.

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