Merging Pay-TV and OTT for the Ultimate User Experience

With the continued evolution of the TV industry, established operators are working to develop their winning strategy to defend their existing business, while tapping into the consumers’ love affair with SVOD and other services. By taking the user experience as the essential element for future business decisions, they will be able to attract and retain the most valuable consumer segments, just as the distinction between pay-TV and OTT is blurring.

One of the most significant deals in recent media history is testament to this shift in industry thinking. In September 2016 cable giant Liberty Global announced it would team with Netflix to ‘onboard’ the Netflix service in over 30 countries.

Liberty Global CEO Mike Fries reversed years of hostility to the SVOD rival when this summer he declared; “Netflix is more of a friend than a foe to us. Where we bundle Netflix into our set-top box, customers now pay us more and buy more products from us and churn less. They are happier, so this is about giving the customer what they want.”

It’s a win-win for the SVOD leader too as it seeks to attract more customers. CEO Reed Hastings said the agreement, “combines the Netflix app – and all the great content it provides – into the familiar, easy-to-use cable box [and] makes both more appealing.”

In fact, research by IHS Markit concludes that the integration of Netflix into pay-TV is having a positive impact on operator KPIs, generally benefiting their business while co-existing well with more traditional parts of the bundle. The trend toward SVOD-operator partnerships supports the argument that OTT services are a video ‘top-up’ in pay-TV homes, rather than a replacement for a cable or satellite subscription.

It is not just about on-demand either. While there are many in the industry that want to show that everything is going time shifted, the reality is that pay-TV subscribers still do the majority of their viewing live — with sports and news dominating live viewing behavior.

Consumers see the linear EPG as an information portal to ‘what’s going on’ and typically will always start out a TV session with a ‘What’s on Live’ request to the set-top box, thereafter splitting their time between integrated VOD and OTT sources. The EPG will not disappear anytime soon. However disruptive apps may be on the decline, as EPGs continue to hold a major advantage through their established infrastructure and ease-of-use. 

This is why delivering user experiences that cater the wants and needs of various types of viewers is so important to future business success.

The advice of Ampere Analysis to pay-TV operators is to ditch the ‘us and them’ mentality and instead to integrate important OTT services. This will provide a marketplace where customers can find OTT content via the set-top box with the help of unified search and recommendation.

The theory behind OTT onboarding is that by making it easy for consumers to find the OTT content they would have sought anyway, operators also make it easy for them to return to the traditional pay-TV universe afterwards. If operators have the right user experience (UEX), content discovery and content promotion systems it should be possible to guide people to the wealth of pay-TV content that is found via traditional channels or traditional on-demand stores.

In this new era, content is everywhere, not just on TV. And this converged media landscape means reinforces that there is no longer a debate between the EPG and apps. The question is how do pay-TV providers use their content expertise to bring the best of both together?

NAGRA is helping pay-TV operators respond. The OpenTV Signature Edition changes the traditional TV formula by making the navigation experience intuitive for both young and old viewers – an all-in-one-place viewing experience that delivers variety and choice via a single UI, with one remote control. And, because the solution is cloud-based, the same content and integrated experience is also available on all other screens connected to the service.

Content search can be achieved through keyboard, voice or smartphone. Recommendations are either delivered traditionally through deeper analytics or innovatively with simple search mechanisms that lead customers to content they may not have otherwise thought of. A new and re-defined EPG also brings a new level of additional features, such as personalized content channels, linearized SVOD and VOD channels.

A 4K-ready set-top box completes the eco-system. It gives the pay-TV operator a fully managed device for the best experience in popular SVOD apps, such as Netflix, with guaranteed quality of service and quality of experience no matter the changes and updates demanded by the app provider. 

Ampere’s analysis of consumer behavior reveals the successful operator of the future is one that allows tech-savvy consumers to build their own bundle of TV and on-demand services, creating their own next-generation bundle. The highest-spending, fastest-growing customer segment has big expectations of accessing any content on every device. If their needs are not met, this fickle group is not afraid to switch to another provider, with twice the chance of churn.

It follows that the successful pay-TV operator is one that can offer all these things in one place. Responding with content and technology that delivers a compelling, seamless user experience

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