European Pay-TV operators invest in OTT services
Europe’s pay-TV operators have largely improved their offer during the last year to offer OTT services and non-linear consumption, a report found out.
The research has been conducted by the MTM consultancy for Nagra, a Swiss technology group.
The report surveyed pay-TV industry executives in Europe in May. They believe that revenue growth will come from new products rather than the traditional pay-TV offer.
Rising non-linear consumption
“Although European pay-TV executives are not yet seeing the same levels of disruption anticipated by their U.S. counterparts, they are anticipating a more challenging market environment. Future growth will be driven by new products, rather than traditional pay-TV offerings,” Nagra said.
Their landscape is changing rapidly because of widespread availability of lower-cost over-the-top (OTT) services and rising non-linear consumption.
To respond to changing consumer behaviours and expectations, pay-TV providers in EMEA are investing in 4K/Ultra HD (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%).
Significant threats from Amazon or Apple
“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.”
Executives think pay-TV providers could play a role in the aggregation of OTT services. But they are also convinced that the industry faces significant threats from new devices and ecosystems such as Amazon and Apple TV.
“The research indicates that the pay-TV industry needs to learn from the new breed of digital-first and data-led OTT service providers”, said Simon Trudelle, Senior Director, Product Marketing, NAGRA. 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.”