euro news_news 25/02/2016 18:35 Page 4
IHS: Integrating Netflix benefits
pay-TV returns
ntegrating Netflix into
traditional pay-TV has
had a net positive
impact on operator KPIs,
according to a survey of
service providers
conducted by IHS. The
SVoD offering has generally
been found to benefit
operators’ business, while
co-existing well with moretraditional parts of the
bundle.
In a Client Report - Netflix
on pay TV: A marriage of
convenience - exclusively
revealed to Advanced
Television, Ted Hall, research
director, notes, however, there
is concern that consumption of
some pay-TV services—among
them, premium movie packages,
TVoD and operator’s ownbranded SVoD offerings (if they
have them) —could be impacted
by growing usage of Netflix or
other third-party SVoD services,
which in turn would negatively
impact operator ARPU and
revenues.
“In contrast to the model for
selling channels and VoD to
their customers, operators make
very little direct revenue from
carriage of
Netflix: They
typically receive a
share of the
ongoing
subscription fees
only for
customers that
sign up via the
operator’s set-top
box - most Netflix users either
already have an account or sign
up via a more user-friendly
device, such as a PC/laptop or
tablet,” advises Hall.
Netflix also plays only a
limited role as an upsell driver
for indirect revenue
generation—10 of the 25
operators that have active
partnerships in place (mainly
I
those working with TiVo)
provide access to the service
only via their most advanced
set-top boxes, featured in
higher-tier bundles or carrying
operators have followed suit -as
of February 2016, a total of 26
deals (25 still active), by IHS’s
count, had been struck. Many
more are likely to follow, with
additional monthly service fees.
According to Hall, there is a
growing acceptance that
pressure on some core elements
of the pay-TV offering is an
unavoidable
consequence
of the rise of
pure OTT
services. The
rationale for
providing
access to
Netflix / thirdparty OTT is
therefore mainly based on
keeping customers on-platform,
increasing customer satisfaction
and reducing churn. It will also
provide a source of 4K U