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HomeArticlesTechnicalEnabling new Pay-TV monetization opportunities with OTT TV
Wednesday, 04 March 2015 06:59

Enabling new Pay-TV monetization opportunities with OTT TV

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There’s no doubt about it, the Pay-TV space is changing and changing quickly. New TV consumptions patterns and OTT TV are playing a big role in this transformation. But OTT does not mean the end of Pay-TV. Quite the contrary – it brings with it a wealth of new opportunities for Pay-TV service providers around the world and especially in India where consumers are hungry for new and advanced services and the technology that makes it possible. To remain competitive and relevant, Pay-TV service providers cannot wait any longer to position themselves in the OTT space – they need an OTT TV strategy to not only broaden their subscriber but offer compelling services that answer consumer demand for new and innovative services.

New consumption patterns

In today’s multi-device world, we see it every day: TV consumptions patterns are evolving at a faster pace than ever before.  Take the millennium generation. Ask teenagers around you and they will tell you that they watch music on a tablet, series on their PC or live sports on the living room big screen TV.  They don’t really think about how it is delivered, they just get to that content when they want it in the most convenient way.  This behavior may be more prevalent in the United States or Europe but it is spreading fast in other parts of the world as consumer adoption of new technologies experiences exponential growth.

In parallel and in reaction to these new viewer behaviors, recent OTT announcements in the US market (HBO, CBS and Sony) show that TV is changing.

With OTT becoming a viable option for delivering content, it’s not just more channels that sells for Pay-TV operators, it’s also about how content is delivered and optimized for on-demand consumption that makes a difference.

OTT Segmentation:  business threat or new opportunity?

OTT is segmenting the market and this is here to stay.Yet any change in the business playing field is often seen as both a threat and an opportunity – but opportunity is what matters and what Pay-TV operators can make the most of.

What platform features are then needed to be successful in this new environment?

It’s clear that any baseline OTT service now needs to offer a compelling mix of live and on-demand TV content, available across a broad selection of operator and consumer devices.

But expectations now include advanced broadcast features like multi-language audio tracks and subtitles.  Shrewd personalized recommendation and promotion features are needed to ensure that the content catalogue delivers its full potential to consumers, not to mention a multi-device consumer experience that makes the operator brand stand-out in all interactions between the viewer and its TV applications. What’s more, nPVR, Download-to-Go and Electronic-Sells-Through services can further enhance the OTT experience and create further stickiness. Finally, device reach is also a key success factor. From set-top boxes to consumer devices, it requires a secure player in an environment that remains complex to manage with new major OS software releases from CE vendors coming out at least once a year.

All these features can deliver value to all subscribers, either the traditional broadcast subscribers as a TVextension or to address the new pure OTT segment.

OTT monetization opportunities for Pay-TV

But what does all this mean in terms of monetization opportunity for all the incumbent cable, satellite and telecom players and how can India benefit the most? Fromthe NAGRA perspective, looking at it from the innovation and development side, OTT TV opens up many new exciting monetization opportunitiesthat broadly fall into three major categories:

-Extending market reach by going off-net

-Creating targeted offerings and whole-sale bundles, typically with distribution partners

-Upselling new or existing content catalogs

Pay-TV operators in India can look at the ever increasing number of leading service providers around the world have taken steps to monetize these opportunities and learn how to leverage OTT TV to their benefit: StarHub in Singapore, Foxtel in Australia, Dish Networks in the US, PrisaTV and Canal+ in Spain, Numericableand Canal+ in France to name a few.

Driving Pay-TV industry transformation 

These examples show the value OTT can bring to a Pay-TV offer.They also show that we are not just talking about OTT but also about a TV industry transformation and anticipating the needs of a new generation of consumers.  And Pay-TV service providers are in an ideal position to make OTT work to their advantage and drive the future of the industry.

OTT not only gives them an opportunity to extend new services to existing and new customers, but opens the door to new monetization and revenue models in a relatively short amount of time compared to traditional services, and what’s more in a seamless and flexible and cost effective way.

Even though the OTT TV market in India is in its infancy, it is poised for growth and promises an exciting future with the growth of mobile devices and the changing patterns of viewers to consume content on such mobile devices at an affordable price point.

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