Home Analysis Three ways small Pay TV operators can compete with larger media rivals

Three ways small Pay TV operators can compete with larger media rivals

Historically, bigger operators were able to differentiate their offers using sophisticated content distribution technology, but the development of cloud technology has changed this, making workflows cheaper and improving the front-end UX. App stores on standardised STB platform operating systems support super-aggregation and mean small Pay TV providers can accumulate compelling content without breaking the bank. Meanwhile, small operators can leverage their local market knowledge and the ongoing importance of linear TV and linear channel catch-up TV.

Tom Morrod, Research Director at Caretta Research
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The democratisation of technology and content creation means that the TV market is more competitive than ever. Tom Morrod, Research Director at Caretta Research, argues that there’s now a lower barrier to enter the market. Anyone can create videos and upload them to YouTube, for example, and it’s inexpensive to set up a streaming service. So, how can smaller Pay TV operators ensure they continue to thrive in this ever-evolving space?

“My argument would be that there is a place for companies that have local billing relationships, understand what the local market looks like and have linear content from that market,” said Morrod. Speaking at Connected TV World Summit last month, he gave three top tips for smaller operators to stand out in this crowded field.

Get your head in the cloud

Historically, bigger operators were better able to differentiate themselves from others because they could afford more sophisticated technology for content distribution. The development of cloud technology has changed this.

“Cloud makes everything cheaper,” Morrod explained. “If you go to cloud-based technologies, like transcoding, for example, or just putting the content workflow or asset management into cloud-based services and providers, then it scales much better.”

In turn, this improves the user experience, because consumer-facing, front-end deliverables are all facilitated by standardised operating systems, allowing for better personalisation and ad insertion. This helps smaller Pay TV operators compete with TV giants by producing higher quality systems more affordably.

Use apps to aggregate content

Accumulating content doesn’t have to break the bank, either. Morrod argued that smaller Pay TV operators have the potential to be super-aggregators — they just need to harness the right, affordable, technology. “Super-aggregators are basically the same as regular aggregators, but they use apps rather than linear channels,” he explained. He recommended using a standardised operating system (OS) platform with an app store to achieve this, like Android TV’s Operator Tier or a reference design kit (RDK). “Use technology providers that are multi-tenanted because it’s cheaper,” he said.

Don’t abandon linear content 

Finally, while streaming giants like Netflix and Amazon have established market dominance in SVOD, there’s still a place for linear TV. “There’s a huge demographic that prefers linear,” according to Morrod, and it’s a valuable segment that operators shouldn’t take for granted. He argued that local providers have an edge over the OTT-only providers: through sophisticated interfaces, they can mix linear and [linear channel] catch-up with on-demand content and gain valuable data that enables them to reach wider demographics in their local market.

“The benefits of being a smaller local Pay TV operator are actually pretty meaningful,” Morrod commented. “As a small provider, you know your local market… and all of those big companies that have great content on their apps, they actually need local providers because they need trusted brands.”

In Morrod’s opinion, by implementing these solutions, smaller operators can enjoy the innovation that would come from a larger development team but at a fraction of the cost, particularly with cloud technology. Aggregation through apps will also improve the user experience and means that smaller Pay TV operators won’t have to keep licensing expensive new content.

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