Pay-TV facing uncertain future

10.38 Europe/London, November 24, 2011 By Julian Clover

Changes in market conditions and consumer behaviour are causing an uncertain future for the pay-TV industry, according to analysts Ovum.
A new study suggests pay-TV subscriber growth to be slowing in several markets as free-to-air digital TV services and web-based offerings lure subscribers away.
“While these changes have already started to occur, their impact will become increasingly pronounced over the next five years. This will force a shift in the strategic approaches of pay-TV operators if they are to ensure their continued success and survival,” said Jonathan Doran, Ovum principal analyst and author of the report. “In isolation, none of the challenges faced by traditional pay-TV operators present an insurmountable barrier. Many operators have demonstrated their ability to fight back against these threats by rapidly adapting to the changing environment and turning challenges to their advantage. However, when combined, these disruptive factors represent an evolution in the TV market landscape that cannot be reversed.”
Ovum is advising operators to review existing approaches to content packaging so as to ensure that they are providing choice and quality to consumers. Doran suggests operators need to consider creative and shrewd packaging and pricing initiatives, exceeding the levels of flexibility and choice offered by web-based competitors. Differentiation should be built around service quality, reliability, and device interoperability.