PayTVJune 28, 2022

Pay TV Operators can Adopt a Hybrid Approach to Stream TV Services

There has been a paradigm shift in how people are paying for entertainment. Digitized content has picked up steam as consumers have easy access to the Internet and cheap mobile subscription packages. However, the emergence and rise of the OTT platforms have changed the entertainment landscape, resulting in a substantial tectonic shift and tormenting the Pay TV subscription.

The Pay TV streaming services in the US have witnessed the lowest penetration in the last ten years. On the other hand, Europe will lose 100 million Pay TV subscribers by 2027. Disney shuts most of its channels in Western Europe, whereas Sony sells its UK and CEE operations, and many other players are now switching to other forms of distribution.

Why this Change?

One of the significant reasons for Pay TV subscriber decline is high costs and the unavailability of comparable choices. Also known as cord-cutting, the OTT monetization system has changed the broadcasting market. Around 50% of the US population in the 22-45 age group doesn’t watch cable TV at all, resulting in a loss of over US $6.6 billion in 2021.

Similarly, advertisers are rethinking their share of ad spending on Pay TV platforms due to the widespread acceptance of OTT video streaming.

Also, when was the last time you saw an interesting movie or series on your traditional cable TV? Don’t remember, right? Well, that’s because the content is not frequently refreshed. Users find more captivating content on OTT platforms as you’ll come across new releases almost every day.

That’s why many traditional production companies find it challenging to survive the evolving video streaming growth and ensure creativity. Users are predominantly triggering the shifts in the streaming industry; today, Netflix has more than 140 million subscribers. Hence, many traditional TV and film companies are turning to Netflix and Amazon instead of cheering Pay TV in the OTT vs. Pay TV battle as the earlier one seems to be losing.

Conversely, OTT video streaming has grown multifold in the last few years. Thanks to technological advancements, we can leverage the benefits of greater broadband rollout and increased internet speeds. Additionally, the smartphone helps users view their favorite movies anytime and anywhere. Your smartphone is packed with high-speed Internet connectivity and OTT apps, giving you access to highly diverse content at your fingertips.

Further, the OTT video streaming industry aims at providing exceptional customer service at a cheaper cost. Using data analysis and artificial intelligence, they offer better content recommendations.

Indeed, cutting-edge cable TV recurring billing software makes invoicing and payments easy. However, the ease and the flexibility of subscribing and canceling services offered by the OTT monetization system also compels users to shift to OTT platforms.

What can Pay TV Do?

Pay TV service providers have an opportunity to sustain their user base by streaming OTT services on TV. Indeed, it is overwhelming for users to access a wide variety of content, subscription options, and increasing apps, making them wonder what exactly they want.

However, cable operators can enable users to avail of OTT and TV services through a single package, integrating OTT services through Pay TV STBs and platforms. All they have to do is take Netflix and integrate it into the TV! TV operators can shift certain aspects of service delivery to the cloud and maintain the current bases of set-top boxes. They can even migrate to hybrid boxes and empower broadcast delivery with IP.

With such a hybrid model, TV operators can free themselves from the clutches of the operator’s network, save on distribution fees and ensure a straightforward source of revenue. That way, they can even tap on global expansion because there is zero dependence on fixed networks. Pay TV operators are gradually adopting D2C distribution models with Disney+ and Paramount + rollout.

Additionally, integrating Pay TV services with OTT technology can bolster the bring-your-own-device approach that can help reduce the costs of adopting multiple OTT services.

The Best of Both Worlds

For a successful hybrid transition, Pay TV operators needs an automated and a robust subscription billing platform that can meet the evolving needs of the pay television. Magnaquest’s Sure ensures simplified subscription billing lifecycle and management by effortlessly automating acquisition process and increasing conversions and sales.

We will soon see a NextGen TV in the industry, offering higher quality signals, D2C delivery, and multi-screen services. This will open new sources of revenue for everyone, from OTT service providers to traditional Pay TV giants.