OTT: cable should be pragmatic

March 12, 2014 15.15 Europe/London By Chris Dziadul, Cable Congress 2014

Netflix FamilyCable operators should adopt a future strategy of pragmatism towards OTT, according to Joel Leroux, MD, Accenture.

In his view, the cable industry currently has three advantages over OTT providers, namely superior broadband technology, superior financial performance and a strong legacy content distribution model.

This will nevertheless be challenged in the next few years.

Indeed, the number of cable TV subscribers will increase from only 541 million in 2013 to 567 million in 2017, with CAGR being only 1%.

At the same time, the number of online video users will increase from 507 million to 823 million over the same period, with CAGR at 13%.

Leroux said there are four approaches to the pragmatism he suggests.

The first, ‘Retreat’, involves investment in networks and B2B customer service, cutting costs elsewhere.

The second, ‘Embrace (Supermarket)’, sees investment in networks and integration of OTT ecosystems without consumer relationships.

The third, which he termed ‘Co-opete’, is the same as enabling champion, and in addition integrating consumer relationships.

The fourth, ‘Compete’. Involves investing heavily in network and product development.

Leroux added that in ‘Embrace’ and ‘Co-opete’ improving network perceived quality would be a key differentiator for cable operators.

Furthermore, cable operators could leverage their current strengths in a platform as a service model, with consumers and content providers benefiting.