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Three-quarters of pay-TV execs believe innovation is a top priority

24 July 2017
Three-quarters of pay-TV execs believe innovation is a top priority

A new report says the 76 per cent of global pay-TV executives believe innovation is now a top priority.

The research for NAGRA and MTM, delivered as part of the Pay-TV Innovation Forum, found that executives believe the launch of new products and services is the best way to maintain and grow their businesses in a highly competitive market environment.

The research surveyed senior pay-TV executives around the world, investigating their views on the main growth challenges facing pay-TV businesses and the most important commercial opportunities that lie ahead.

Some 74 percent of those surveyed believe that innovation has become more important to the pay-TV industry over the previous 12 months, and 92 percent of respondents said launching new products and services will be integral to driving growth. Half also stated that building strategic partnerships with content providers will be key to ensuring their future.

Many operators reported a slowdown in revenue growth, 46 percent of respondents reported difficulties maintaining growth – up from 40 percent in 2016, with competition from other content distributors (84 percent) and OTT providers (70 percent, up by 22 percent from 2016) as key challenges.

The research also found that content piracy is a significant challenge for pay-TV operators, with 54 percent of respondents agreeing that it will lead to greater pressure on the industry over the next five years and less than a quarter (24 percent) believing it is a diminishing problem.

The report says operators are already taking steps to be more competitive, having launched or planning to introduce new services over the next five years, including virtual reality or 360-degree video content solutions (52 percent), mobile-first TV services (70 percent) and standalone OTT and SVOD platforms (85 percent).

“These initial findings indicate that pay-TV providers globally recognise the tough environment in which they operate,” said Simon Trudelle, senior director, product marketing, NAGRA. “While at first it may appear that they are facing a more competitive marketplace, with pressures from new entrants and pirates, it’s encouraging to see that 76 percent believe innovation to be a top priority and over nine in ten agree that launching new services will be critical drivers to growth. By developing new innovations, accelerating business transformation and building strategic partnerships with content providers, operators can ensure they are fit-for-purpose into the future.”

Jon Watts, managing partner, MTM, added, “The initial results from this survey and our forums with industry executives around the world confirm the widespread perception that the pay-TV industry is facing increasing competition, not only from legitimate commercial services but also from illegal pirate services.

By continuing to innovate through investments in new app-based solutions and OTT services, as well as developing new packaging and pricing options for consumers, operators are investing for the future. Best-in-class providers should be well positioned to grow, but the challenging market environment is set to continue.”

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