‘Significant’ improvement in EMEA pay-TV providers’ portfolios over last 12 months
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| 28 June 2017

Research from NAGRA has revealed that pay-TV operators see next-generation content aggregation, advanced advertising offerings and TV everywhere as drivers for continued growth.

Conducted in partnership with international research and strategy consultancy MTM, The Pay-TV Innovation Forum report into the state of the European TV market examined the progress of industry innovation and uncover the strategies that will drive its next phase of growth.

Overall, the research found that pay-TV providers in EMEA have innovated and improved their product and service portfolios significantly during the last year, with over-the-top (OTT) services and non-linear consumption transforming the European pay-TV landscape.

Furthermore, the study indicated that 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. Although European pay-TV executives are not yet seeing the same levels of disruption anticipated by their US counterparts, they are anticipating a more challenging market environment, it predicts that future growth will be driven by new products, rather than traditional pay-TV offerings.

Yet the survey also cautioned that future growth is becoming significantly more challenging, with operators’ main objective being maintaining growth in a fragmented market. NAGRA noted that industry executives believe that there are two key trends transforming the European pay-TV industry: widespread availability of cheaper OTT services and free content and growing non-linear consumption. To respond to changing consumer behaviours and expectations, pay-TV providers in EMEA were found to be investing to improve the consumer experience. This took the form of 4K/Ultra HD (offered by 25% of providers in 2017, up from 8% in 2016), third-party apps (53%, up from 46%), and standalone OTT services (36%, up from 31%).

“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.”

“There is a strong call to action across the European pay-TV industry to respond to these external pressures by transforming business models and addressing new market segments with specific offerings,” added Simon Trudelle, senior director, product marketing, NAGRA. “The research indicates that the pay-TV industry needs to learn from the new breed of digital-first and data-led OTT service providers. To break away from the traditional pay-TV mind-set, operators will have to be more agile in their approach to meet consumer demand, putting specific focus on micro-services, data analytics, continuous testing and integration.”