“ Traditional pay-TV is still a pretty formidable part of the market .” – Steve Nason , Parks Associates
continue , but ultimately the focus on providing a good customer experience to access content – whatever source it may be – will remain paramount for any network provider or pay-TV operator . In addition – super aggregators are also stepping in , those who aren ’ t just offering TV / Video content , but the likes of Apple , Amazon and Google with multi-pronged offerings .” BUNDLE . “ Network providers will continue to bundle their services and will look to bundle additional services ,” says McCarthy . “ Connectivity services ( voice and Internet ) are where the distinction between in-home and outof-home disappears . Entertainment services – where the traditional pay-TV services ( linear channels , DVR , VoD ) get bundled with thirdparty OTT services as well as gaming apps . We can already witness mobile being bundled into offerings . Operators are offering home security systems ( connected to their broadband service ) and bundling discounts on these offerings too .”
“ We have seen others try to enter the infrastructure play – namely Google ( which stopped in 2019 ). But we don ’ t expect others to enter bundling via a network play . Instead , most will continue to go over the top and bundle with another service , which can be seen with Amazon Prime offers Prime Video for free , and once more of these services become established , we will see the market developed and how these are bundled .”
“ Network service providers will continue to be bundlers ,” asserts Routt . “ There will be new , 5G / fixed wireless entrants likely with OTT video rights . New types of bundlers are laying foundations , particularly Amazon who has a history of building subscriptions around a platform of goods , initially sold primarily by third parties . Amazon views MVPDs in the same way they did brick and mortar store owners .” ECOSYSTEM . “ As the only part of the ecosystem that speaks to all the main content partners and can , via TV services , aggregate them all , network providers will continue to be key ,” asserts Eisenberg . “ Netgem works with its ISP partners , predominantly the challenger altnets but increasingly some of the larger incumbents , by guiding the viewers , providing content and bringing it all together leaving the telcos do what they do best : negotiate large
content deals ( e . g ., Sky and Netflix , O2 and Disney +) and manage subscriptions / payments for their significant customer base .”
“ Increasingly , providers are changing their services to meet new consumer demands ,” suggests Adam Davies , senior manager product marketing , Synamedia . “ They may create their own services , or partner up with others , or , most likely , do both . Much is said about the traditional service provider as a super-aggregator and although there are audiences who will go out and seek specific content , the service provider can provide a federated service bringing convenience and value for the viewer , offering a simple route to market for services looking to grow audiences quickly , and easily .”
“ Network providers will absolutely still have a role moving forward – they know their customers through and through ,” adds Bergenwall . “ While we may see many include D2C distribution as part of their service packages , they will continue to offer other , bigger bundles .” PIONEER . “ We [ Virgin Media ] were the pioneer of the quad-play model in the UK and believe that our aggregated approach , along with our flexible bundle options will allow us
“ The real danger to pay-TV is streaming piracy siphoning off billions .” – Abe Peled , Synamedia
to remain agile as the market continues to fragment ,” says Bouchier . “ The pandemic has accelerated the need for ultrafast and reliable connectivity and through our range of bundles , customers can get access to our market-leading speeds while building a TV and entertainment package that suits their needs ,” he advises .
“ We ’ ve been looking at the rise of the new organisations that provide bundles ,” reports WorkShare ’ s Broughton . “ There doesn ’ t seem to be an industry term just yet , but we ’ re using ‘ A La Carte Aggregators ’, or the ALCAs for short . Amazon , Roku and Apple are examples of these and worryingly for pay-TV all demonstrate a degree of asymmetric competition – a bit like a supermarket competing with a local bakery . By offering a service wider than just content , these players can compete strongly and still turn a profit . Anecdotally , it has been reported that last year , HBO made more sub additions in 2019 from Amazon then it did from all other sources ,” he advises . What new payment models are likely to emerge ? “ Monthly subscription is unavoidable ,” asserts Haleem . “ Hence this is not far off from the pay-TV subscription model . But the flexibility to unsubscribe and not be tied to device rental ( STB ) is where the differentiator is . DCB ( Direct Carrier Billing ) is an attractive model which is gaining popularity . The emergence of e-wallets and QRPay will change the models going forward . Ultimately these will make it much easier for consumers to pay for the content they want ,” he adds .
“ One of the opportunities that pay-TV has , that hasn ’ t been addressed , is compounding ,” suggests Bisson . “ For different aspects of the value chain , the opportunity is to combine . For pay-TV operators , that means effectively porting the pay-TV tiering model to streaming , which nobody has done ,” he asserts . He notes that service providers have brought SVoDs such as Netflix on platform , but they are all separately priced . “ There is no real differentiation for me subscribing directly to Netflix or subscribing through Sky ,” he adds . “ If there was a package of multiple services - the three most popular - at a 30 per cent discount - then that becomes an interesting business model ,” he argues . It ’ s the same as the old pay-TV model , but no one has done it . There ’ s still opportunity to leverage that position as the aggregator within the household . The device that is connected to the TV , if that ’ s a Sky Q box , I ’ d happily take a package that involved a discount of 30 per cent on my three most popular streaming services ,” he admits . “ So there is opportunity still ; it ’ s a case of working out the economics .”
“ The key word for everything right now seems to be around flexibility ,” notes Buckland . “ Consumers want a flexible approach to their video services , enabling them to access the content they want without paying for the content they don ’ t . We will likely see more hybrid business models , where consumers can access some content for free with an adsupported model , other content as part of the subscription , and premium videos on a payper-view basis .” DIFFERENTIATORS . “ One of the key differentiators of SVoD services over pay-TV is the ability to view on a monthly contract free basis , which is a major driver of initial sign-up , but also drives increased churn , something that pay-TV operators have looked to protect against through lengthy contracts ,” advises Sidebottom . “ However , many key services are offered as a telco / pay-TV operator bundle or on annual plan , typically up to 40 per cent of Disney + subscribers are bundled or in an annual plan , according to Futuresource ’ s recent Living With Digital consumer survey .”
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