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There’s hope yet for struggling pay-TV operators if they can
evolve their service to incorporate OTT delivered services and a more efficient
delivery platform, according to TiVo.
The set-top-box, cloud platform and TV recommendation engine
has engineered its latest report to suggest its products hold the
solution to the pay TV operator’s dilemma.
“Despite the negative trajectory of the business, pay TV is
too essential to the overall service bundle for operators to contemplate
abandoning it,” the report advises. “Instead, they must invest in improving the
performance of their video service — and determine the investment strategy that
makes the most sense for their business.”
TV subscribers of SVODs or the traditional cable-satellite
package certainly want a change. Juggling multiple TV services is beginning to
take its toll.
Per the report, three-quarters of respondents say they want
universal search, a function that allows viewers to make a single search query
across all their TV services. Moreover, two-thirds choose the video service
they are going to use based on the ease with which they can find something to
watch.
Pay-TV customers, most of whom use SVOD services, are also
looking for help. 86% say they want a single access point for all their video
content.
“In a sign that consumers are learning to appreciate the
simplicity of the big bundle, their interest in à la carte is waning for the
first time in years,” TiVo suggests.
Between 2017 and 2019, the number saying they wanted the à
la carte option took a sharp dip, from 81% to 70%.
That said, and despite the massive growth in SVOD services,
nearly three-quarters of US homes still have a pay-TV subscription.
What’s more, their use of the service far outstrips viewing
through SVOD services. According to stats in the report 216 million regular TV
viewers watch, on average, seven billion hours each week. About 104 million
connected TV users watch seven times less, and 161 million smartphone video
viewers watch almost 20 times less.
Yet cord cutting continues as more and more consumers move
to cheaper alternatives for their TV. The report highlights the likes of
YouTube TV and Sling TV — dubbed Virtual MVPDs (vMVPDs) in the jargon — as
allowing consumers to save money while retaining access to some, but not all,
of the TV channels they love.
Sling TV, for instance, is now the ninth-largest pay-TV
provider in the US, with 2.5 million subscribers. Hulu Live, AT&T TV Now,
YouTube TV and PlayStation Vue are the next four largest pay-TV providers in
the country.
As a result, according to TiVo, pay-TV operators are looking
for options to allow them to combine their physical-based pay-TV solution with
IP services at the set-top-box level. Since most of their customers are SVOD
users too, they are looking to integrate online TV services into the pay-TV
experience.
“Like it or not, for an increasingly large group of
consumers, vMVPDs are a viable alternative to your pay-TV services,” TiVo
insists. “Large parts of the attraction are the low price and flexibility these
services offer.”
TiVo outlines a number of options for the pay-TV operator,
including allowing customers to purchase their own set-top-box (hey, such as
TiVos) or to move to a cloud-based IPTV delivery, which TiVo also offers and
says seems to provide the most significant improvement in customer usage
metrics.
“Eroding pay-TV margins and customer base are negatively
impacting the bottom line for many service operators,” it concludes. “They are
rethinking their approach in order to maintain and improve customer lifetime value.”
The message is clear. Though consumers like having more
choices, they also value simplicity and convenience.
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