Nagra’s Pay-TV Innovation Forum – a panel of European pay-TV industry executives – says operators are shifting focus. The research conducted by consultancy MTM found operators looking to strengthen their core pay-TV offering while diversifying into new areas to monetise their existing subscriber bases.
They believe that revenue growth will come from new products rather than the traditional pay-TV offer.
“Industry executives acknowledge that the European pay-TV industry is changing, with pay-TV operators asking themselves how and where the next-generation of consumers will view video content, and how they can best meet these needs,” said Jon Watts, Managing Partner, MTM. “There is a strong consensus that future growth will be significantly more challenging across the region, with the exception of a couple of pay-TV markets in Southern and Eastern Europe. Future growth will be driven by new services, as operators look to manage the proliferation of lower-cost offerings. This is an exciting time for the industry – there are multiple opportunities for growth, in a wide range of areas, but diversification is key.”
The response has been to introduce new services such as 4K (offered by 25% of providers in 2017, up from 8% in 2016), third-party apps (53%, up from 46%), and standalone OTT services (36%, up from 31%).
“There is a strong call to action across the European pay-TV industry to respond to these external pressures by transforming business models and addressing new market segments with specific offerings,” said Simon Trudelle, Senior Director, Product Marketing, NAGRA. “The research indicates that the pay-TV industry needs to learn from the new breed of digital-first and data-led OTT service providers. To break away from the traditional pay-TV mind-set, operators will have to be more agile in their approach to meet consumer demand, putting specific focus on microservices, data analytics, continuous testing and integration.”
Executives believe pay-TV providers could play a role in the aggregation of OTT services, however they also recognise the industry faces significant threats from new devices and ecosystems including those from Amazon and Apple TV.