The priority in 2018 will, for much of the industry, remains defending a relatively mature and lucrative PayTV ecosystem. On the one hand, this means ensuring that PayTV retains a content and service advantage to all other video services in the market to justify high pricing. On the other hand, and according to analysts Ovum, this means crafting a “defensive hedge” against rapid subscriber growth deceleration by offering lower priced direct to consumer platforms to attract viewers deterred by traditional PayTV.
By Adrian Pennington
PayTV providers have responded to the threat from digital first streamers with multiscreen TV Everywhere services, operator provided catch-up TV and a slimmed-down range of online channels and services that are provided for a lower fee, often with no fixed contract or set-up fees, as stand-alone services. Sometimes known as virtual MVPDs (multichannel video programming distributors), Ovum has split the field into three categories and dubbed them Subscription Linear (SLIN).
The SLIN first category, PayTV OTT, includes the likes of Sky’s Now TV, DirecTV Now, DISH-owned Sling TV, Hulu and YouTube TV while the second (Direct to consumer, or D2C) contain Starz, NHL.TV and NMA League Pass. The third brackets games streaming services such as Twitch Prime and Machinima.
Ovum suggests that such services currently generate a fifth of global OTT subs and that by 2022 this could rise to a third.
Looking at specific markets outside the US, Ovum forecast that in the UK there are currently 13 million OTT video subscribers, of which 9 million are SVOD and 4 million SLIN. In Germany the figures were 7 million (5 million v 2 million) and in France around 4 million (2.5 million v 1.5 million).
The complete Future Pay TV report covers:
- OTT Strategies for Pay TV operators
- Targeted advertising
- Embracing audience data