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Now TV thrives in new “pay lite” segment

Tony Gunnarsson, Senior Analyst, TV

Damien Read, director of product marketing at Now TV, has revealed that the service is expanding the overall customer base for Sky – as opposed to shifting subscribers from pay TV to OTT. According to Read, up to 90% of Now TV subscribers hadn’t even considered taking up Sky’s core pay-TV service before signing up for Now TV. As a result, Sky puts Now TV in a distinct category of its own, which Read calls “pay lite.” OTT is about allowing new customers to dip in and out of content that is otherwise exclusive to pay TV. Impulse is a big thing: Typically, people sign up just to watch a specific TV series (and Now TV sign-ups peak around big events such as the release of a new season of a popular TV series). Now TV has not seen any proof of its subscribers moving up to Sky pay-TV services, but SVOD subscribers tend to switch freely between weekly and monthly packages.

Related research:

SVOD Service Provider Market Share Analysis: Europe, ME0003-000585 (August 2015)

E-sports are “bigger than the NFL”

Adam Thomas, Lead Analyst, Global TV Markets

Modern Times Group (MTG) is signing multi-million-dollar deals to secure the rights to English, Spanish, and Italian soccer. But Arnd Benninghoff, CEO of MTG’s digital media business, MTGx Ventures, has been tasked with finding the equivalent sport for millennials. He thinks he has found it, in the shape of e-sports. According to Benninghoff, the e-sports segment is “already bigger than the NFL,” and MTG stats show that e-sports are played by users for an average of 2.2 hours per day.

Related research:

Innovation Primer: E-sports, ME0002-000605 (September 2015)

“E-sports – the quick-fire evolution of a new content industry,” ME0002-000625 (November 2015)

“Live performance video streaming moves towards the mainstream,” ME0001-000367 (April 2016)

Netgem takes multiscreen services to the next level

Adam Steel, Research Analyst, TV

Netgem provided TV Connect delegates with details of its Multi Screen Like You’ve Never Seen strategy. This means flexibility (e.g. fast connectivity outside the home), improved functionality (e.g. being able to move from the TV screen to a different device seamlessly), and a full out-of-home catch-up experience all coming as standard. By making sure the out-of-home experience is as developed as the in-home experience, Netgem will help take multiscreen TV services to the next level.

Related research:

Availability Analyzer: Operator Multiscreen TV Services in Western Europe, March 2016, ME0003-000665 (April 2016)

UK PSBs recognize digital channels as an opportunity rather than a threat

Jonathan Doran, Principal Analyst, TV

In a TV Connect stream based on the theme of “millennial monetization,” the UK PSBs identified some of the challenges and benefits of branching into cross-platform content. Both Will Saunders (creative director, BBC) and Paul Kanareck (director of online and brands, ITV) talked about the need to evolve their respective digital strategies beyond the simple objective of extending delivery to online, multi-device distribution. But their approaches are slightly different. ITV is driven by its commercial imperative to keep digital audiences engaged but still exposed to advertising. The BBC appears much more focused on the need for segmented content creation and development.

In their bid to remain relevant to younger viewers with diverse consumption habits, both broadcasters have launched YouTube channels. The BBC sees YouTube (as well as its all-online BBC Three channel) as an avenue for developing differentiated content for a distinct audience segment. ITV believes that its YouTube presence has helped drive wider engagement through social media, which in turn helps drive “tune in.” Kanarek dismissed alarmism about the digital generation signaling the end of traditional TV consumption, reminding us that younger audiences have always watched less TV and much of the emerging consumption among millennials is serving different needs (e.g. “video snacking” or UGC). Therefore, millennials don’t present much of a threat to traditional programming. According to Saunders, three short questions – Is it mobile? Is it social? Does it scale? – can sum up the key considerations for content development in a world where broadcast and digital technologies converge.

Related research:

“Vice Media becomes a cross-channel punk media powerhouse,” ME0002-000632 (November 2015)

UHD is the way forward but is still several years from mass market

Ismail Patel, Analyst, TV

A TV Connect panel of UHD technology experts agreed that UHD has many obstacles ahead before it becomes mainstream. Typical challenges include format standardization, bandwidth issues, and reticence vis-a-vis upfront investment from traditional broadcasters. Many consumers in mature markets have become early adopters of UHD TV sets and expect an influx of 4K channels on their screens in a similar fashion to the current portfolio of HD channels. However, only a few channels have launched in the short term, which for many consumers won’t justify the investment UHD devices demand. The expectation is that, for now, UHD will be driven by non-traditional players – namely Netflix and Amazon Prime. With this in mind, Ovum recommends the following:

  • Traditional pay-TV operators need to start collaborating more closely to push the industry towards UHD standardization.

  • Encouraging the consumer market towards UHD can be achieved by single channels or one-off shows, enabling early adopters who do not watch 4K to enjoy the technology on traditional TV.

  • Set-top box manufacturers can facilitate operator migration to UHD with customized solutions.

  • Content producers should make productions in UHD. These can be streamed in UHD on demand, even though linear broadcast might not be at this stage yet. Ovum estimates that the full list of 4K-native content available in English barely exceeds 400 titles.

Related research:

UHD Ecosystem Tracker, ME0003-000564 (June 2015)

4K UHD Technology: Go-to-Market Strategies and Future Outlook, TE0004-001074 (April 2016)

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