Beancounters at GlobalData have decided that the amalgamation of over-the-top (OTT) content into pay-TV offerings will help pay-TV businesses to enhance their service proposition and drive revenue in the coming years, says GlobalData, a leading data and analytics company.
According to GlobalData pay-TV Forecast Pack, the adoption rate of OTT video platforms is increasing across all geographies and has built pressure on traditional pay-TV operators to create an interactive content library, provide on-demand video, and update their portfolio with HD and 4K content.
Antariksh Raut, Senior Analyst of Telecoms Market Data & Intelligence at GlobalData, said: “Increasing broadband penetration will be an important driver for the growing OTT video segment. Many governments have sponsored high-speed broadband initiatives, which continue to help expand broadband coverage and adoption, which is critical for OTT video success.”
Even though the number of pay-TV accounts is expected to rise in the forecast period, mainly fuelled by the increasing adoption rate in developing APAC countries, the total pay-TV revenue is expected to decline from $219.9 billion in 2018 to $210.9 billion in 2024 due to the ongoing cord-cutting trend across developed economies.
A number of pay-TV operators have launched their own OTT video services to maintain their market position and enhance their existing offerings with OTT features. However, premium subscription video-on-demand (SVoD) platforms such as Netflix, Amazon, HBO Now are gaining more relevance with their international and local content portfolio.
Raut said: “OTT service providers are increasing their content budgets to build attractive content offerings tailored for the markets where they operate. For Instance, OTT service provider Netflix over the last several years has been heavily investing to produce films and shows in the local language of the country of operation.
“Adding live and pay-TV channels is also gaining relevance where the competition between pay-TV and OTT service providers is increasing. For Instance, Hotstar, an OTT video platform in India, provides access to live sports and other broadcast channels along with its own content library comprising of movies and web series.”
Raut said: “Companies now understand that partnerships between OTT video platforms and pay-TV service providers have become very important. By adding OTT video content to their bundles, pay-TV service providers can enhance their service proposition, boost customer loyalty and stimulate data usage, ultimately increasing their overall average revenue per user (ARPU) levels. In return, OTT service providers can leverage the existing operator-client relationship, rationalize marketing efforts and take advantage of carrier billing to drive SVoD service adoption.”
