Pay-TV integrating OTT to take on streaming
June 6, 2018
Despite the competition from OTT video services, the global pay-TV market has been growing at a steady pace. According to market research from ABI, the pay-TV market including satellite, cable, and IPTV services is expected to generate $295 million in 2022.
Competition from OTT services is significant in developed markets where the pay-TV market is mature. For example, in North America, traditional pay-TV services lost more than 3 million subscribers in 2017 mainly due to customers switching from satellite, cable, or IPTV services to video streaming services. “OTT is becoming a preferred video viewing platform due to its low-cost and availability on multiple devices without a long-term contract requirement,” noted Khin Sandi Lynn, Industry Analyst at ABI Research.
Pay-TV operators are smartly reacting to the trend by adding OTT services to their platform. DirecTV NOW and Dish Network’s Sling (both in the US) are two examples of video streaming services provided by pay-TV operators. Such services can be accessed through video streaming adapters or mobile devices and provide so-called “skinny bundles”, which are usually low-cost packages with an option to add channels at an extra cost. Similarly, pay-TV operators are starting to deploy Android-based boxes to provide OTT service together with traditional TV platforms. Swedish cable operator Com Hem recently launched Android-based TV Hub, which allows subscribers to access linear TV channels and streaming services. Android-based set-top boxes are a good option for pay-TV operators to compete with OTT service providers while maintaining customer loyalty.
Regionally, the pay-TV market in the Asia-Pacific has grown more than other regions, reaching a total subscriber base of 656 million in 2017, a 7 per cent YoY increase. The pay-TV market is expected to grow at a higher rate in the developing markets in the years to come, while mature markets such as North America and Europe are likely to see a slight decline or sluggish growth.
“Pay-TV and OTT offerings can vary dramatically between regions and between countries in terms of content availability and price. OTT adoption in mature markets will impact pay-TV adoption there, but the more reliable delivery and all-in-one nature of pay-TV will prove valuable in those developing markets,” Lynn concluded.