Innovation is the key to the pay-TV industry’s long-term growth

TV 2018

(Unsplash, 2018)

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Authors: Jacques-Edouard Guillemot, Senior Vice-President, Executive Affairs, Kudelski Group


In the world of pay-TV there is now only one constant we can rely on – change. Consumers are constantly demanding more for less, while increasing competition from new entrants is flooding the market, and the cost of content investments is going up.

And when we add in the issue of pirates stealing that content – particularly valuable live assets – the outlook for the industry might look incredibly disrupted and even in jeopardy. In some regions, particularly Asia-Pacific and Latin America, piracy is such a problem that it threatens the long-term sustainability of pay-TV and OTT services and unless we start taking action now, there may not be a pay-TV industry as we know it for much longer.

To ensure the industry can maintain revenue growth into the future, NAGRA founded the Pay-TV Innovation Forum with MTM in 2016 to identify and catalyze innovation in global pay-TV. In this third year of research, which is generated through in-depth interviews and discussions with executives around the world, including at the World Economic Forum office in New York, as well as through a global analysis of pay-TV service provider portfolios and online survey, it’s clear that there is still much to be done. In fact, 84% of executives surveyed as part of the programme expect competition for all paid-video services to increase dramatically over the next five years to face off against such potential existential crises.

However, there is a light at the end of the tunnel, but only if the industry is prepared to innovate. Executives agree with 90% believing that to grow, providers will have to innovate strongly over the next five years. There is a strong consensus that advanced data analytics and artificial intelligence (AI) are crucial to pay-TV providers’ ability to innovate, providing the insights required to identify new opportunities representing an increasingly important area for investment and development.

Thankfully, our research shows service providers are already taking steps to innovate and ensure not just the survival of the industry, they’re working to cement their positions and value to consumers through six key areas globally:

1. Continuing to invest in next-generation pay-TV services: Many pay-TV providers (65%) have already improved their portfolios over the past twelve months, with a particular focus on developing their core propositions and next generation set-top boxes that can support advanced functionality, including third party apps, personalized recommendations and access to 4K content. Such investments must continue to ensure they meet the needs of consumers. Telecoms and cable providers are well placed to deliver such innovations, as they already have the necessary infrastructures in place to easily launch services.

2. Establish more diverse multiscreen pay-TV propositions: 89% of the executives we surveyed for the research agreed that delivering a seamless and personal consumer experience will be key, especially in light of increased churn and cord cutting that the industry is experiencing. This will in part be driven by catering to changing customer groups and consumption habits, with 77% believing that bundles will evolve substantially over the next five years to meet these needs. Advanced data and analytics will increasingly help pay-TV companies improve customer retention and reduce churn, deliver personalized experiences and relevant advertising, inform customer acquisition and new product development, and automate customer service and care.

3. Super-aggregators – the next wave: With content now available through so many different sources globally, and content owners launching their own streaming services, disaggregation is becoming an issue as consumers are increasingly split between sources. In this post-OTT era, there is a huge opportunity for those service providers who are prepared to become super-aggregators, offering pay-TV and OTT services through a single subscription. By offering simplification in such a fragmented landscape, consumers will likely take up such a service, which will provide real growth opportunities.

4. Converging pay-TV and OTT offerings: With such potential for super-aggregators, it’s logical that the converged offerings will lead to a platform-agnostic model and the evolution away from traditional pay-TV or OTT. Instead we will see a transition into a paid-for-video market where the content source is fundamentally irrelevant to the consumer.

5. Evolve beyond the owned set-top box: As content is now available through a gamut of sources, there is a growing need to move beyond the traditional value proposition. Pay-TV executives recognize this, and believe that network infrastructure and billing relationships, rather than proprietary set-top boxes, are now the gateway into the consumers’ lives.

6. A growing focus on diversification, particularly connectivity: Adjacent services – including mobile and fixed line connectivity – present real opportunities for the industry as they create a means to become more embedded within consumers’ mindsets. Smart home and advanced advertising solutions have particular potential, and 41% and 36% of executives respectively already recognize these areas as strategically important.

There’s no denying the global pay-TV industry continues to be highly disrupted. However, unlike previous research conducted by the Pay-TV Innovation Forum, the 2018 results appear to show we’re at a turning point. While the industry recognizes significant global pressures, steps are being taken to ensure it remains competitively viable to secure its future in the long term. And, with the worldwide pay-TV industry expected to reach $295 billion revenue value by 2022, it’s vital that we take steps to ensure its value for the global economy and the workforce it supports.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

European Business Summit 15th year: Controversy and Constructive Ideas

The digital skills gap is widening fast. Here’s how to bridge it

How a system value approach can help Ireland meet its climate targets

Will Cameron succeed in keeping UK inside the EU and reverse the present economic downturn?

Eurozone plans return to growth

How tech companies compare at protecting your digital rights

Brain drain 2017: why do medical students need to emigrate to become doctors in 2017?

Energy security: The synchronisation of the Baltic States’ electricity networks – European solidarity in action

Drawing scenarios for drifting Britain; elections or May’s deadlock?

Nuclear test ban treaty critical to global collective security – UN chief

State aid: Commission approves €1.9 billion Czech scheme to support uncovered fixed costs of companies affected by coronavirus outbreak

‘Maintain calm’ and ‘exercise patience’ UN envoy urges, as Nigeria heads to polls

Syria: Civilians caught in crossfire, UN refugee chief urges Jordan to open its border

IMF: World cup and productivity

More bank bailouts at taxpayers’ expenses

Ocean life faces ‘onslaught of threats’ from human activity, but tools exist to save it

MasterCard @ MWC14: Innovation in times of regulatory uncertainty

5 reasons why biodiversity matters – to human health, the economy and your wellbeing

Can Greece’s democratic institutions keep it in Eurozone?

Joint UN-Red Cross appeal to end rising sexual violence as a weapon of war

The West definitively cuts Russia off from the developed world

Eurozone: Economic Sentiment Indicator recovering losses

‘Great Pacific Garbage Patch’ clean-up project launches trial run: UN Environment

This is how we can help Australia organize the world’s generosity

Tuesday’s Daily Brief: #GlobalGoals progress, essential meds, updates from Cox’s Bazar, Sudan and DR Congo

A brief history of cryptography and why it matters

New Iraqi Prime Minister-designate urged to act on reforms and accountability

What is carbon offsetting?

IMF – World Bank meetings: US – Germany clash instituted, anti-globalization prospects visualized

China in My Suburbs

Finding calm in the COVID-19 chaos 

Neelie Kroes at the European Young Innovators Forum: Unconvention 2014

How to rebuild trust and integrity in South Africa

MEPs agree on new rules to tax digital companies’ revenues

How to build public trust in a sustainable energy future

UN Afghan Mission ‘outraged’ by deadly Taliban attack in Kabul, as hardline group threatens election violence

Not a single child spared the ‘mind-boggling violence’ of Yemen’s war

Available mental health services: is it only about professionals or institutions?

EU Council agrees to reform the system for motor vehicles but with “restricted” power for the Commission

World Malaria Day: 7 things to know about the deadly disease

State aid: France to recover €8.5 million of illegal aid to Ryanair at Montpellier airport

This is why coral reefs are so vital for the planet

Peacekeeping chief highlights challenges facing UN Police

Why philanthropy for – and by – Africans is the future

Most ‘precious’ and ‘scarce’ resource of our time is dialogue, UN chief tells Doha policy forum

“The Sea is vast as it admits all rivers”, Ambassador Yang Yanyi of the Chinese Mission to EU gives her farewell address in Brussels

The Parliament defies a politically biased Banking Union

Here’s what could happen to the global economy this year

As inequality grows, the UN fights for a fairer world

EU allocates over €22 million to help Palestinians in need

LGBTQ+: The social evolution of a minority

UN chief urges India and Pakistan to dial down tensions in wake of Kashmir attack

Israel @ MWC14: Israel The Start App Nation

This brewery is ditching plastic six-pack rings to save marine life

How has technology changed – and changed us – in the past 20 years?

The hostilities in south and eastern Ukraine resume; where could they lead?

Lies and reality about incomes and wealth in the EU

Open-plan offices make workers less collaborative, Harvard study finds

Service and Sacrifice: For Ghana, UN peacekeeping is a ‘noble opportunity to serve humanity’

Adolescent health has been overlooked for too long

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s