TV Everywhere is cable’s best defence against cord-cutting but could accelerate the unravelling of the relationships that keep the industry going, according to Stuart Sikes, president of Parks Associates.
Speaking on a panel session at the CTAM Europe EuroSummit this morning, Sikes said that cable operators were not actively promoting TV Everywhere services to their subscribers. He cited the example of Swisscom, which had bundled TV everywhere with its top-tier offering. This, he said, did not address the danger of lower-tier customers churning.
Parks Associates research showed that about 10% of customers were looking to “cut the cord” in the immediate future, and that very few of these would be retained by the offer of TV Everywhere services. Awareness of such services remained low, Sikes said. However, consumers did see value in TV Everywhere and a significant proportion would be willing to pay for it, which presents both an opportunity and a threat to cable as consumers could turn elsewhere for such services, Sikes added.
While cable operators had good relationships with content providers, the issues involved in delivering services over multiple operating systems to multiple devices with multiple DRMs was challenging. Sikes said that revenue from TV Everywhere would not be significant enough to pay for infrastructure needed to support it. There was also a trend towards the replacement of high-value subscription services with relatively low-value over-the-top TV Everywhere services, he said.
“Pay TV operators may be in for a long period when their return on investment on these services will be negative,” said Sikes.
Speaking on the same panel, Gary Davey, executive vice-president, programming, Sky Deutschland, said he believed the primary TV screen would be “around for a long time” but with a second-screen alongside. “We don’t measure the profitability of TV Everywhere separately, but as part of the core product,” he said. Davey said Sky Deutschland had to engage with its customers on all platforms. “It’s getting very complicated and we have to learn how to manage that,” he said.
Joshua Danowitz, vice-president and general manager, international, TiVo International, also speaking on the TV Everywhere panel, said that service providers increasingly would have to come round to delivering TV Everywhere services. “There are definitely operators in Europe that are leaning in…and not trying to block the user experience,” he said. While cord-cutting had taken place in the US, there was relatively little cost difference between bundled broadband and pay TV offered by cable and the cost of buying broadband and content separately from OTT providers that were not able to provide Quality of Service, he said.
Erwin Rensen, director, proposition management, Ziggo, said that service providers had to deliver flexibility and convenience to their subscribers. “We all consume content in different ways,” he said. “That means embracing OTT as well. Of course it’s a threat as well because there are content providers that can deliver services cheaper.”
Annika Sten-Parson, head of sales, product and marketing, Com Hem, said that cable operators’ brands had to embrace new ways of viewing TV and “not be seen as the old way” to consume content. “We need to embrace it all – that’s obvious,” she said. Sten-Parson said that the Swedish cable operator had chosen TiVo for its platform because of the importance of making content it acquired available and searchable to users.
Aleks Habdank, director, digital entertainment products, Virgin Media, said that his company saw TV Everywhere simply as the extension of its existing services to other screens. Habdank said that Virgin Media was seeing a “great return” on its TiVo service, with some additional revenue per user and a great deal of user engagement.
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