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Cheaper content demand, piracy & OTT popularity dog A-Pac pay-TV, avers innovation forum

MUMBAI: NAGRA, a Kudelski Group company, in partnership with MTM, has revealed the latest findings from the Pay-TV Innovation Forum 2017 that looks into the Asia-Pacific pay-TV market.

The global research programme examines the state of pay-TV innovations and strategies that will drive the next phase of growth for the industry.

Service providers and content-owners from the region participating in the forum in May 2017, agreed that the Asia-Pacific pay-TV industry is entering a transitional period during which operators will need to adapt their business models and technology platforms in order to thrive in the changing environment. New offerings will have to reflect changing consumer demand for cheaper and more personalised content packages, including OTT services, to effectively expand the range of services at different price points. Delivery infrastructure and technology platforms across APAC will also become much more IP-based, with content being increasingly delivered via both fixed-line and mobile broadband networks. This need for change is being driven both by the persistent threat of content piracy and the increasing popularity of OTT services that are using aggressive pricing strategies to acquire customers.

Despite these challenges, pay-TV providers in Asia Pacific are investing in the future – continuing the steady roll-out of IP-connected set-top boxes (provided by 72 per cent of providers in 2017, up from 66 per cent in 2016), PVRs (63 per cent, up from 56 per cent), standalone OTT services (28 per cent, up from 23 per cent), and new adjacent services such as advanced advertising and Smart Home solutions (offered by 27 per cent, up from 16 per cent).

Industry experts highlight two urgent investment priorities that will help service providers to navigate the transforming video and TV services market:

Concerted approach to tackling content piracy: to limit illegal access to content, operators are calling for content owners to take their own independent actions to monitor, track and stop the distribution of illegal content, and for industry strategies that would bring together pay-TV operators, ISPs, content owners and industry associations to work with regulators and governments to take further legal action.

Development of more consumer-focused and diversified product portfolios by embracing new business models, operators can develop new packages and offerings that appeal to changing consumer tastes at a wider range of price points, including skinny bundles, personalised offerings, seamless multi-screen TV everywhere services and smart home solutions. Operators also cited potential opportunities for growth through new business-to-business services, including harnessing data with new analytics tools to offer enriched data services and support targeted advertising.

“The pay-TV industry in Asia Pacific is going through a challenging, transitional period. Traditional pay-TV revenues in many advanced Asian markets are under pressure, while emerging markets are growing, but delivering low ARPUs. The industry is being increasingly disrupted by content piracy, especially around live sports, and impacted by low-cost OTT offerings, making it harder for pay-TV companies to invest with confidence,” said MTM managing partner Jon Watts . “Pay-TV service providers in Asia-Pacific need to take stronger action against piracy to secure their future, while maintaining investment in new services and innovation.”

“There is a strong call to action across the pay-TV industry in Asia-Pacific to respond to these growing challenges. Operators and content owners need to be innovative in how they transform their technology and business models to respond to these pressures,” said NAGRA senior director product marketing Simon Trudelle. “The Forum’s research highlights that service providers not only recognise the problems they face from content pirates, but want to see actions taken limiting illegal access to premium content to maintain revenue and ensure quality content continues to be created. By working in partnership with vendors, operators can be more agile and better adapt to the fast changing landscape.”

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