European broadcast leaders see OTT more as opportunity not threat
Details
Joseph O'Halloran
| 25 June 2019

While the growth of OTT is undoubtedly having an impact on the pay-TV and content industries, and piracy is an ever-present threat, the European broadcast industry is focused on growth opportunities for and in the end, the 2019 Pay-TV Innovation Forum has revealed.

The latest edition of the Forum — a global research programme for senior executives designed to explore the biggest challenges and opportunities facing the pay-TV and content industries and organised by TV services and security technology specialist Nagra and research firm MTM, fundamentally recognised the challenges facing the sector, but also found that they are becoming more optimistic about responding to OTT disruptions.

The forum found that industry executives were optimistic about the pay-TV industry’s ability to reinvent aggregation models. However, executives noted that existing aggregation models must evolve in response to the rising popularity of OTT services, and an anticipated decline in the number of linear channels. A striking 94% of participants believe that by 2024 major platforms in European markets will carry 20% fewer linear pay-TV channels than today. This will mean that some smaller channels will become unsustainable.

The other key finding was that the anticipated proliferation of subscription OTT services will likely present opportunities for pay-TV providers to become ‘super-aggregators’ of content. Four-fifths of executives believe that major OTT subscription services, such as Netflix and Amazon Prime Video, can be valuable as part of the pay-TV offer. In addition, they see that on-boarding OTT services can deliver both convenience and utility, as well as creating new marketing and bundling opportunities.

Most executives are optimistic about the longer-term benefits of integrating OTT services into their pay-TV offer: only 26% believe that the growth of paid OTT services will have a negative impact on the European pay-TV industry over the next five years.

“The growth of OTT services is undoubtedly having an impact on the pay-TV and content industries and digital transformation is emerging as a key priority,” remarked Simon Trudelle, senior director, product marketing, Nagra, on the European findings of the 2019 Pay-TV Innovation Forum. “It is exciting to see that while challenges exist, focus is on creating opportunities for growth and in the end, delivering services that will delight consumers and keep them engaged. The next few years will prove to be pivotal in this regard.”

“Europe’s pay-TV industry is at a crossroads, with slowing growth in many markets and increasing competition on the horizon,” added Jon Watts, managing partner, MTM. “After nearly two decades of growth, we’re starting to see the signs of a very different industry – with a greater focus on the network, a broader offering of products and services, and new approaches to aggregation and content retailing. It’s encouraging to see signs of optimism and widespread interest in these new approaches, as the industry looks for the next wave of growth opportunities that will see it into the 2020s.”