TV operators opt for hybrid OTT as preferred business model

DetailsJoseph O'Halloran | 29 July 2015

With over-the-top now firmly established within service providers' pay-TV portfolios, the hybrid OTT model has become the paying platform of choice says research from MPP Global.

With flexibility a key differentiator not only in competition with online vide firms but also pay-TV rivals, the hybrid OTT model enables content owners to offer different price packages, ranging from paying on a TVOD (transactional video-on-demand) basis to signing up for a subscription (subscription video-on-demand, SVOD).

amazonThis means that operators can attract not only those willing to pay on a pay-per-view basis but also those who want unlimited access to all content by purchasing a subscription. Such models have already been deployed by Amazon for its Amazon Instant Video service, as well as by Hulu for its online streaming service in the US.
In its analysis, the ad company examined key OTT business model trends and gained exclusive insights into the views and opinions of leading operators and broadcasters across the globe. It found that fundamentally as many as three-fifths of operators regarded the hybrid OTT model as the best fit for their business.

The research also found that many consumers no longer want "all you can eat" packages but instead prefer tailored and personalised bundles of content and channels they have hand-picked. This has been the spark for the number of so-called 'skinny' pay-TV offerings that have come to the fore. Set time period passes, as most notably deployed by Sky's NOW TV in the UK, were also cited in the report as a way in which operators can attract new customers without cannibalising their current services. A growing number of content owners were also found to be looking to introduce video metering.

Commenting on the findings, Paul Johnson, MPP Global chief executive officer said: "This research shows how the OTT market is constantly evolving and growing. With an increasing need to reach and attract customers and stand out from competitors, more and more TV operators are shaping their business models to accommodate consumer demands while offering a reliable revenue stream. We can expect to see the number of OTT models continue to increase with consumers embracing the changing way they can view and pay for video content."