TBI Tech & Analysis: Unpacking aggregation & the evolving role of pay-TV

The way we watch TV has dramatically changed over the past eight years and so has the way we are paying for it, as Omdia’s senior principal analyst Adam Thomas explains.

New research from Omdia has highlighted the incredible rate of change that is impacting the TV and online video sector, underlining how quickly the sector’s players are having to adapt.

In 2015, just 13% of homes paying for a TV/video service subscribed to both an online video service and a traditional pay-TV service. By the end of 2022, that figure had more than trebled to 47%.

On the flip side, in 2015, around 82% of such homes were taking traditional pay TV in isolation, a figure that had dropped to 38% in 2022 – with Omdia forecasting that percentage to continue to decline and reach 27% in 2028.

The new Omdia research report, Multisubscription TV & Video Forecast: 2015–28, highlights the importance of a changed emphasis among pay-TV operators, which are now commonly embracing aggregator or super-aggregator strategies.

As third-party apps come to be seen as an essential part of the entertainment mix for customers, Omdia concludes that legacy operators need to weigh up the opportunity cost in terms of churn if they do not offer the most popular apps to their subscription base.

Impact assessment & outlook

Although the picture varies from country to country, with some territories still seeing pay-TV growth, it has been clear for some time that traditional pay TV is on a downward path.

Pay-TV operators have reacted by aggregating online video apps and services, plus other content types, into a single user-experience hub within their universe.

It is these super-aggregation and super-bundling efforts that are helping drive the dramatic changes seen in this research.

Looking one step ahead, to be most effective, the aggregated offerings from pay-TV operators and telcos require sophisticated universal search and discovery capability across the content being provided ‒ so making it totally distinct from the individual channel and content packages associated with classic pay-TV offerings.

This unified experience will convince subscribers that aggregators offer tangible benefits to simple self-bundling.

The extract above is from TV & Video Industry Developments Impact Brief ‒ September 2023, which offers analysis of key events shaping the global pay-TV and online video markets, including mergers and acquisitions, product innovations, service launches, and strategic changes.