The final conclusions of the 2017 Pay-TV Innovation Forum have revealed a market that in order to prosper will need to address quickly a number of issues such as piracy, intensifying competition and business model disruption.
Set up by content protection firm Nagra and research and strategy consultancy MTM,the forum is designed to examine the state of innovation in the pay-TV market and provides perspectives on the most attractive areas of opportunity for both service providers and content owners in Europe, Asia Pacific, Latin America and North America.
The 2017 programme has highlighted fundamental findings such as that the pay-TV industry is in a period of unprecedented global change, with many service providers facing a perfect storm of slowing growth, intensifying competition and business model disruption.
Indeed, over four-fifths of executives agree that competition in the pay-TV industry is set to increase over the next five years, and nearly three-quarters believe that service providers will struggle to grow their businesses during the same period.
Three key disruptive challenges facing the industry worldwide emerged from the study: the proliferation of cheaper OTT services, changing consumer behaviour and demand, and the rise of content piracy. The data noted that two-thirds of executives agree that competition from subscription VOD services will have a negative impact on pay-TV, pushing down prices and increasing churn, and a similar percentage agree that we will see a new wave of mobile-first services to cater to evolving consumer viewing habits.
On piracy, the research found that half of executives believe content piracy will lead to greater pressures on the industry over the next five years (up from 41% in 2016) with online streaming, peer-to-peer downloads and IPTV piracy cited as the most important forms of piracy affecting service providers and content owners today. The research goes further to examine actual revenue lost to pay-TV piracy, estimating that service providers could stand to gain $7 billion in unrealised pay-TV revenue annually, if at least a quarter of consumers of pirated pay-TV services would switch to a legitimate option. Additionally, 72% of pay-TV providers see the benefits of engaging in anti-piracy activities, combining technology, legal and enforcement action and consumer education, to bring tangible positive results.
Looking to what needs to be done to ensure growth, as many as 85% of executives agree that to grow, pay-TV service providers will need to innovate strongly over the next five years. Three-quarters regard innovation as a top strategic priority. Executives were found to be increasingly focused on delivering standalone OTT services (64% of respondents believe it to be a commercially attractive area opportunity), multiscreen TV Everywhere (67%), app-based TV services (61%) and advanced functionality (53%) such as voice and 4K, alongside innovative content propositions (74%) and new pricing and packaging models (78%.)
“The second edition of the Pay-TV Innovation Forum provides a comprehensive view of the transformation that is happening in our industry and identifies key areas of opportunity for service providers and content owners,” commented Nagra senior director of product marketing Simon Trudelle. “It also brings to light new trends, and in particular the rise of content piracy which emerges as a growing concern. Overall, it is clear that the industry recognises the changing nature of TV and the need to adapt quickly to this fast-changing environment. By developing new services and partnerships as part of their innovation roadmap, service providers and content owners will be able to transform and successfully prepare their businesses for the future.”
The 2017 programme has highlighted fundamental findings such as that the pay-TV industry is in a period of unprecedented global change, with many service providers facing a perfect storm of slowing growth, intensifying competition and business model disruption.Indeed, over four-fifths of executives agree that competition in the pay-TV industry is set to increase over the next five years, and nearly three-quarters believe that service providers will struggle to grow their businesses during the same period.
Three key disruptive challenges facing the industry worldwide emerged from the study: the proliferation of cheaper OTT services, changing consumer behaviour and demand, and the rise of content piracy. The data noted that two-thirds of executives agree that competition from subscription VOD services will have a negative impact on pay-TV, pushing down prices and increasing churn, and a similar percentage agree that we will see a new wave of mobile-first services to cater to evolving consumer viewing habits.
On piracy, the research found that half of executives believe content piracy will lead to greater pressures on the industry over the next five years (up from 41% in 2016) with online streaming, peer-to-peer downloads and IPTV piracy cited as the most important forms of piracy affecting service providers and content owners today. The research goes further to examine actual revenue lost to pay-TV piracy, estimating that service providers could stand to gain $7 billion in unrealised pay-TV revenue annually, if at least a quarter of consumers of pirated pay-TV services would switch to a legitimate option. Additionally, 72% of pay-TV providers see the benefits of engaging in anti-piracy activities, combining technology, legal and enforcement action and consumer education, to bring tangible positive results.
Looking to what needs to be done to ensure growth, as many as 85% of executives agree that to grow, pay-TV service providers will need to innovate strongly over the next five years. Three-quarters regard innovation as a top strategic priority. Executives were found to be increasingly focused on delivering standalone OTT services (64% of respondents believe it to be a commercially attractive area opportunity), multiscreen TV Everywhere (67%), app-based TV services (61%) and advanced functionality (53%) such as voice and 4K, alongside innovative content propositions (74%) and new pricing and packaging models (78%.)
“The second edition of the Pay-TV Innovation Forum provides a comprehensive view of the transformation that is happening in our industry and identifies key areas of opportunity for service providers and content owners,” commented Nagra senior director of product marketing Simon Trudelle. “It also brings to light new trends, and in particular the rise of content piracy which emerges as a growing concern. Overall, it is clear that the industry recognises the changing nature of TV and the need to adapt quickly to this fast-changing environment. By developing new services and partnerships as part of their innovation roadmap, service providers and content owners will be able to transform and successfully prepare their businesses for the future.”
