European Operators Predict End Of The Traditional Bundle
Nagra has been conducting its annual pay TV innovation forum since 2016.
The traditional bundle that has been the common currency of pay TV almost since its inception will change beyond recognition over the next five years. That is one conclusion of a panel of European pay TV executives polled by Kudelski Group’s revenue security and multiscreen software subsidiary Nagra, as part of its Pay-TV Innovation Forum 2018.
The panel found that 80% of executives believe pay-TV bundles as we know them today will have changed substantially by the end of 2022.
There was less agreement over exactly how bundles would change, with new packaging methods cited including both linear and non-linear content bundles, content-led packages in various genres such as sports, film, and kids, as well as skinny bundles to attract new subscribers. Some executives also predicted a second wave of content-re-aggregation under pressure from consumers, a trend which is already showing up in some markets.
In combination with the change in bundles, data driven analytics will be crucial in segmenting customers and personalizing services as well as enhancing content discovery and recommendation. Data-driven analytics was cited by 93% of the Nagra panel as a major opportunity for the industry. Respondents noted that churn reduction, customer service, personalization and targeted advertising delivery would be key areas where data analytics would add value to pay TV businesses.
This also feeds into the User Interface, which executives suggested needed to evolve to enable that integration between linear and on-demand content as part of the predicted change in bundles. Unified search and voice control would be key features of that experience. Other surveys have indicated that consumers are less interested in sophisticated UIs that require effort to master and want a more standardized approach akin to the Netflix experience. At the same time though voice control is popular and so operators may be able to differentiate themselves in the way they integrate that into their services and lineups. Increasingly users will want to be able to ask service related questions about billing for example through voice driven UIs, as well as for the traditional remote-control functions.
Above all content will continue to be at the center of propositions, perhaps even more so. In the Nagra panel executives identified opportunities to expand their content portfolios to attract users, including production of original and exclusive content, content localization and the development of new formats and programming, such as eSports. Strategic partnerships with content owners will be pivotal in developing these portfolios, with 80% of respondents seeing them as a top strategic priority for pay TV providers.
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