A new report says European pay-TV executives believe growth in the industry will be driven by new products rather than traditional pay-TV offerings.
The Pay-TV Innovation Forum report, conducted by NAGRA in partnership with international research and strategy consultancy MTM, examined the progress of industry innovation to uncover the strategies that will drive its next phase of growth.
According to a panel of European pay-TV industry executives polled in May 2017, as growth in the European pay-TV industry matures, operators are shifting focus – looking to strengthen the core pay-TV offering, while diversifying into new areas to monetise their existing subscriber bases.
The report says European pay-TV executives are not yet seeing the same levels of disruption anticipated by their US counterparts, but they are anticipating a more challenging market environment – future growth will be driven by new products, rather than traditional pay-TV offerings.
Industry executives believe that there are two key trends to transforming the European pay-TV industry: widespread availability of cheaper OTT services and free content, and growing non-linear consumption.
The report says that in order to respond to changing consumer behaviours and expectations, pay-TV providers in EMEA need to invest in improving the consumer experience, by introducing 4K (offered by 25 percent of providers in 2017), third-party apps (53 percent), and standalone OTT services (36 percent).
Innovation must also be a top priority for the market, with the report suggesting future growth will be driven by consumers taking up new and innovative products and services, such as skinny bundles, personalised packages, and seamless multiscreen experiences, rather than increasing take up or prices of traditional pay-TV packages and services.
The report highlights three areas of innovation that will help European pay-TV providers to remain competitive and grow their businesses:
- Investing in next-generation content aggregation and discovery
- Developing advanced advertising and data offerings
- Building seamless multiscreen TV Everywhere services
“Industry executives acknowledge that the European pay-TV industry is changing, with pay-TV operators asking themselves how and where the next-generation of consumers will view video content, and how they can best meet these needs,” said Jon Watts, managing partner, MTM.
“There is a strong consensus that future growth will be significantly more challenging across the region, with the exception of a couple of pay-TV markets in Southern and Eastern Europe. Future growth will be driven by new services, as operators look to manage the proliferation of lower-cost offerings. This is an exciting time for the industry – there are multiple opportunities for growth, in a wide range of areas, but diversification is key.”