LONDON—New research from Omdia provides some important insights into a major trend that is transforming the video industry—the bundling of pay TV and streaming services by operators.
Omdia researchers report that in 2015, just 13% of homes paying for a video service subscribed to both an online video service and a traditional pay TV service but by the end of last year that figure had more than tripled to 47%.
That has already had a major impact on the TV and online video sector by making carriage of streaming services a central part of negotiations between operators and programmers. This week, Charter and Disney resolved a carriage dispute by allowing Charter to carry some of Disney's existing and upcoming streaming services on Charter’s pay TV video packages and by giving Charter more flexibility crafting video packages.
The Omdia research also found that In 2015 some 82% of such homes were taking traditional pay TV in isolation, a figure that had dropped to 38% in 2022 – with Omdia forecasting that percentage to reach 27% in 2028.
Adam Thomas, senior principal analyst at Omdia, said: "Although the picture varies from country-to-country, it's been clear for some time that traditional pay TV is on a downwards path. Pay TV operators have reacted by aggregating online video apps and services, plus other content types, into a single user-experience hub within their universe. It is these super-aggregation and super-bundling efforts that are helping drive the dramatic changes we are seeing."
The new Omdia research report Multisubscription TV & Video Forecast Report: 2015–28 highlights a changed emphasis among pay-TV operators, which are now commonly embracing aggregator or super-aggregator strategies.
As third-party apps come to be seen as an essential part of the entertainment mix for customers, legacy operators need to weigh up the opportunity cost in terms of churn if they do not offer the most popular apps to their subscription base, the researchers said.
"To be most effective, these aggregated offerings require sophisticated universal search and discovery capability across the content being provided, so making it totally distinct from the individual channel and content packages associated with classic pay-TV offerings,” Tony Gunnarsson, principal analyst at Omdia, added. “This unified experience convinces subscribers that aggregators offer tangible benefits to simple self-bundling."
