Pay TV operators are still best-placed to offer video services to customers, even in a connected TV world, but they must change their business models, according to Canal Digitals digital entertainment director Tore Melling.
Speaking at the Connected TV conference in London this morning, Melling said that connected TV services were still struggling with business models because there are too many parties involved and not enough money to go round. ÂIn a world of connected devices, every man and his dog has their own value chain or ecosystem. Everyone wants a cut,Â he said. According to data from the Nordic region, media usage is increasing, in part due to users multitasking on various devices, but the amount of money being spent is unchanged. ÂMedia use is increasing but share of the wallet isnÂt Â there is no more money,Â Melling said.
Canal DigitalÂs services, which are available via cable and satellite platforms in the Nordic region, are offered on various devices including tablets and computers but Melling said that 95% of customers still prefer to watch linear content on their TV at home, due in part to not having to choose from a vast array of content, and also due to its simplicity. ÂI love my Apple TV and my connected TV but there are user issues,Â Melling said. ÂIt might be small things like having to log on but in a world of servers, log-in processes, bandwidth issues, there will always be minor struggles. As long as the satellite hasnÂt fallen out of the sky and the set-top hasnÂt crashed, I will always get TV in high definition with my pay TV service.Â
Melling however sounded a note of caution that young consumers growing up with access to unlimited free online content will not be prepared to pay for a TV service in the traditional sense. ÂI donÂt think there is a chance they will pay for TV,Â he said, adding that the way pay TV operators currently package and sell content will disappear. The solution, he said, was to start vertically integrating content across various platforms by theme. ÂWe should start to think about our entertainment offerings in terms of verticals. For those that are interested in cars, we have to sell them [content about] cars across all different devices and mediums, whether thatÂs mobile content or web content for example. The same goes for football, golf, sailing Â whatever you are interested in. That is the way we see it,Â he said. Â
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