The rise of the hybrid17 October 2016
It’s an exciting time to be in the TV industry. While viewing of linear TV still accounts for the vast majority of consumption in the UK, OTT services, like Netflix and Wuaki, are beginning to have an impact. One approach to embrace such services is to partner with them, giving viewers access to a range of OTT players alongside linear TV. However, it’s important to take steps to ensure this happens with the consumer in mind.
Keep it on the STB
Research by IHS has shown that Apple TV is now the third largest set-top box manufacturer in the world, an incredible feat given its status as a strictly OTT platform. This demonstrates the demand for OTT players, and that consumers will turn to dedicated OTT devices to access them if necessary. There is an opportunity for traditional TV operators to meet this demand by incorporating these OTT players directly within their set-top boxes. This approach reduces the risk of viewers switching viewing to a dedicated OTT device and not returning to linear TV.
Give the viewer choice
Viewers are turning to OTT players to gain greater control over their viewing and to access greater choice, but also to watch programmes that are exclusive to those players. Netflix, for example, is currently the only way to watch a host of exclusive shows including Orange is the New Black. By combining OTT players with traditional linear TV, operators can provide consumers with the choice as well as the specific programmes they are looking for.
Such partnerships can be mutually beneficial to traditional operators and OTT providers. While OTT is seen as a disruptive to the TV industry, it still doesn’t have the reach or popularity of linear TV. Partnering enables OTT providers to market themselves to a significantly wider audience, while the TV operator can offer a wider choice to the customer, all in one place.
Make the experience seamless
Key to the success of such a hybrid service is a seamless experience, making it easy for the viewer to move between linear TV and OTT players. This seamless experience should include content discovery services that highlight OTT programmes alongside linear TV (this includes the TV guide itself, search and recommendation hubs).
Ultimately, a seamless experience will require even tighter integration between services, such as federated logins enabling viewers to share credentials and preferences across players and services.
True alternative to pay-TV
Research has shown that while free-to-air television platform viewers have rejected pay-TV subscriptions, they are interested in topping up their viewing choices with both subscription and transactional OTT services. Therefore, the combination of free-to-air platforms with OTT services is a compelling option for consumers, especially if they are well integrated.
Although the rise of OTT services has caused a huge disruption in the TV industry, whether or not we will see a much greater impact in the future remains to be seen. Instead of focusing on competing against OTT players, traditional TV operators need to look at how they can integrate them into their existing platforms to give viewers the experience and choice they’re looking for.
By Matthew Huntington, chief technology officer, Freesat