The research, from NAGRA and MTM, found a number of drivers in the market: evolving consumer expectations and habits; a significant increase in on-demand content consumption; pricing pressures driven by new over-the-top (OTT) offerings; and simplified access to pirated streaming services.

To address these challenges, service providers are leveraging OTT, streaming and cloud technologies as well as advanced data analytics and anti-piracy measures to stay ahead of the game. In parallel, they are considering reviewing their pricing and packaging models and services to better respond to a more segmented market place.

Industry executives highlight three key priorities that will help to drive growth and ensure the North American pay-TV industry retains and strengthens its position as the most innovative and diversified in the world:

OTT, streaming and cloud technologies: to attract younger audiences, pay-TV operators are focusing efforts on significantly strengthening OTT and multiscreen propositions. According to industry executives, there are strong generational differences in terms of perceived value of pay-TV services. Younger audiences expect to consume on-demand content on mobile screens versus the traditional linear TV environment and bundles preferred by older generations. As a result, operators are rethinking their pricing and business model approaches to better address all demographics and market segments. Cloud-based technologies can also help service providers compete more effectively with Internet-based rivals.

Advanced data and analytics: more than half of industry executives polled cited advanced data and analytics as an area that will have a significant impact on the North American pay-TV industry over the next five years. Developments in advanced data and analytics will help pay-TV operators gain more flexibility and insight while reducing operating costs. As a result they can deliver value through highly-relevant, personalised content and user interfaces, targeted advertising and improvements to sales and marketing operations.

Anti-piracy measures: the threat of content piracy is growing in the North American pay-TV market. Key challenges include the emergence of illegal retail IPTV set-top boxes and apps, the growing costs of pay-TV subscriptions and the increased sophistication of pirates. However, new more holistic anti-piracy solutions and increased industry awareness, along with smarter legitimate on-demand TV services are expected to reduce the impact of piracy in the long term.

“North American executives clearly recognise that the industry is experiencing a period of change and disruption – and are making the investments required to remain competitive in a challenging market,” said Jon Watts, managing partner, MTM. “This year’s research programme shows that the North American industry is moving forward, developing and extending product and service portfolios and addressing new opportunities. In areas like OTT, data and analytics and IoT, the region is leading the way.”

He added: “There are clearly significant challenges ahead, as competition grows – but the pay-TV industry is on track to deliver improved value propositions to consumers. This is an industry in transition and it’s exciting to see the progress that is being made.”