Simon Trudelle, senior director, product marketing at NAGRA, talks about the opportunities and threats to the pay TV industry.
The pay TV industry is under growing pressure from cheaper OTT services, changing consumer behaviour and demand, and the rise of content piracy. Our 2017 Pay TV Innovation Forum research programme identified a strong consensus amongst executives: 71% think that competition will increase over the next five years and 85% agree that in order to grow, pay TV service providers will have to innovate strongly during the same period, citing the launch of new products and services as critical drivers to growth.
In that context, pay TV executives are increasingly focused on delivering standalone OTT services (64%), multiscreen TV Everywhere (67%) app-based TV services (61%) and advanced functionality (53%) such as voice and 4K, alongside innovative content propositions (74%) and new pricing and packaging models (78%).
What do service providers need to prioritise to deliver a TV experience across a broad range of retail IP devices as well as traditional TVs?
Today, virtually all major TV service providers and broadcasters have adopted multiscreen OTT distribution services – and for good reason: consumers have a growing appetite for IP video streaming and a growing customer segment is embracing video streaming – and its benefits – now more than ever.
As more content goes over IP networks, service providers have to consider an upgrade to their end-to-end infrastructure to eliminate backend silos and integrate features such as cloud DVR, ABR just-in-time packaging, CDN and device management, and now addressable advertising. Smartly transitioning from broadcast to IP is all about being pragmatic in offering the best consumer experience while optimising costs.
NAGRA is introducing OpenTV Signature Edition at the IBC. What market need does it meet and what elements should such a pay TV ecosystem include?
OpenTV Signature Edition answers the complexity of how to deliver a fresh and satisfying, upgradeable-on-the-fly pay TV service that can deliver an unparalleled user experience for content harmonisation in today’s fragmenting online TV market. OpenTV Signature Edition is a fully integrated eco-system that comes bundled with third party services and applications that offer the following elements: (a) maximisation of operational efficiency, (b) maximising of profitability – via analytics and efficient content management, (c) scalability through multi-tenanted cloud and (d) frictionless access to content for all users no matter their content navigation preferences.
How are the threats to revenue security for content service providers changing?
As broadband and mobile internet becomes ubiquitous, the focus of piracy has shifted from signal theft to content sharing, taking a huge toll on rights holders and service provider revenues. In the digital world, content can be acquired from live broadcast streams or even from hacks into production servers, and the damage to potential revenues is tremendous. NAGRA estimates that pay TV providers alone collectively lose up to US$7 billion per year because of content sharing. Advanced cyberattacks that include ransomware attacks and stolen files being held for ransom have already affected media companies like Netflix, and most recently HBO. And although Netflix’s production subcontractor paid the requested amount, the hackers leaked the content anyway. Leaked content, whether through hacking or piracy, erodes the overall value of the entire content production and distribution chain. These threats are extremely serious and must be countered.
What tools are available to operators to overcome these security challenges?
It all starts with proven, Hollywood trusted card-based and cardless CAS and multi-DRM systems that meet stringent Hollywood and sports rights holder security requirements. Once content is secured, it must be marked with the industry’s leading NexGuard forensic watermarking technologies for live and on-demand content, making it traceable back to its source if leaked. NAGRA’s extensive monitoring service help operators discover and quantify the impact of leaked content, and our takedown and legal services ensure pirate streams are stopped at their source, through their service providers (CDNs, ISPs, etc.) or in the courtroom.
How far is the use of consumer data likely to change the way TV is delivered and what do service providers need to prioritise to benefit from this to the maximum possible extent?
As TV service providers face a business transformation challenge with the rise of “digital native” OTT providers, they need to drive their business using more relevant data. But they often don’t have that data, as legacy TV systems are not always two-way connected.
The use of anonymised unstructured and structured data, coming from multiple internal and external sources, can fill that gap. Combined with configurable data science algorithms, it allows for the development of powerful prediction engines. The resulting KPI-based action loops, enabled by the data analytics platform, empower internal teams to better drive business operations in areas such as consumer value optimisation, content management, service operations and advertising management.