CHESEAUX, Switzerland & PHOENIX—Now in its fourth year, the Pay-TV Innovation Forum, organized by NAGRA and MTM, has released its global findings based off of industry executives in North America, Europe, Asia Pacific and Latin America. The Forum focused on a number of key industry trends, including OTT services, next-generation content aggregation, piracy and pay-TV digital transformation, among others.
On the surface it seems that pay-TV and OTT services are opposing entities, but a majority of industry executives that took part in the forum actually see OTT technology having a positive impact on their business. Seventy percent of those polled shared this view, while 21% see a negative impact. While new streaming services like Apple TV+ and Disney+ will soon be rolled out, they are not seen as a significant threat to pay-TV and can actually be an opportunity to adopt a super-aggregator model for these services. Super-aggregator platforms could emerge within the next five years, according to 77% of executives. However, combined services—like what Disney will offer with a bundle of Disney+, Hulu and ESPN+—could prove as a significant competitor.
However, pay-TV execs still recognize that certain things have to change in their industry to appease customers, and one such solution could be the restructuring of traditional pay-TV packages. Over the next decade, 91% of respondents believe innovation in product pricing and packaging will be key to attracting and retaining customers, especially the next generation of consumers.
One thing that they don’t expect to change, however, is the importance of keeping tier-one sports on pay-TV. OTT services are beginning to challenge pay-TV’s sports dominance with things like OTT aggregators and direct-to-consumer services from leagues, clubs and broadcasters. A total of 85% of respondents believe OTT sports streaming will increase in their country from by 2024. As a result, 93% see sport streaming services as valuable partners for pay-TV providers seeking to aggregate content and services.
Content piracy is still seen as a “challenge” to pay-TV businesses, according to 60% of the forum, with 65% believing that piracy has gotten worse or stayed the same in their countries, with nearly half believing piracy pressures will increase in the next five years. To combat piracy, the execs believe it will take a combination improvements to pay-TV offerings, deeper collaboration across the industry and new technology.
It was also widely believed among respondents (79%) that to compete, pay-TV will need to invest in areas like big data analytics, automation, artificial intelligence and machine learning. They mostly believe that they can be doing more to invest in these data and analytics capabilities.
“This year’s findings illustrate the ongoing need for transformation, as the pace of change across the industry accelerates. The wave of new OTT offerings entering the U.S. market are causing considerable anxiety, but the industry remains confident that it can continue to thrive,” said Jon Watts, managing partner for MTM. “Pay-TV providers will have to continue to innovate, developing better offerings and services that deliver what consumers are looking for. Faced with ever-growing competition, increasing fragmentation and fast-paced innovation, pay-TV businesses will have to decide which opportunities to pursue and which investments to prioritize.”
Find the full report here.
