‘Operators combat Netflix with hybrid services’

TV operators are looking to launch OTT services to provide multiscreen access and compete with the likes of Netflix, with most favouring a hybrid model, according to research by e-commerce firm MPP Global.

MPP found that 60% of operators said that hybrid OTT, combining transactional and subscription video-on-demand in a single service, was the model best suited to their business.

According to MPP, four out of five operators see changes in how their customers are accessing goods and services, and three out of four are integrating new pricing and delivery models such as SVOD and TVOD. The research found that 86% of operators anticipate that revenue from SVOD and TVOD services will increaseover the next 18 months.

According to MPP, 37% of organisations believe that these new pricing models deliver competitive differentiation, while 32% believe they provide additional revenue opportunities and 32% believe they reduce churn.

The research found that TV operators favour three broad pricing and packaging models. The first is to introduce smaller, tailored or personalised bundles of content and channels users have chosen for themselves, rather than a big bundle.

Second, they are favouring time-limited passes, such as the day, week and month passes offered by Sky for its Now TV service, and third, they are looking to make use of video metering technology to offer freemium services, providing consumers with limited free access to video content, based on a choice of considerations which the operator can define, such as happy hours offering free access at low usage periods.

With the latter model, operators have an opportunity to attract customers by offering free access before asking them to sign up for a transactional or subscription service.

Some 56% of organisations surveyed believe that cloud technology has been the primary driver for new delivery models.

“This research shows how the OTT market is constantly evolving and growing. With an increasing need to reach and attract customers and stand out from competitors, more and more TV operators are shaping their business models to accommodate consumer demands while offering a reliable revenue stream,” said Paul Johnson, CEO of MPP Global.

“We can expect to see the number of OTT models continue to increase with consumers embracing the changing way they can view and pay for video content.”