Pay TV operators need multi-screen offering to survive

Summary:Multi-screen service essential for customer acquisition and retention amid changing consumption habits toward on-demand and mobile, and bundling most profitable business model, industry watchers say.

COMMUNICASIA, SINGAPORE--It will be crucial for pay TV operators to adopt multi-screen services in order to stay competitive,  as consumers become increasingly mobile and expect on-demand offerings, industry observers say.

At the CommunicAsia tradeshow here Thursday, Doug Lowther, executive vice president of digital TV at Irdeto, noted that the TV Everywhere initiative has been picking up momentum globally. He said subscribers of TV Everywhere in 2012 had almost doubled over the past year, driven by competition for over-the-top (OTT) services. TV Everywhere is a concept where customers of premium content such as TV shows and movies, can also access them online on other devices.

Subscriber churn has always been an issue for operators, but having a multi-screen offering can help mitigate that, said Lowther. 

"A lot of cable operators before had a protected environment. Now more of those competition barriers are eroding. Mobile and tablets are now valid ways to consume [content]," he noted. "The adoption of video on-demand in Asia Pacific is relatively low at the moment compared to other regions like North America [though]."

The Irdeto executive added that companies currently with a first-mover advantage in the region include Astro in Malaysia and Foxtel in Australia--both of whom are also his company's clients.

"A free multi-screen TV service is a viable tool for attracting consumers back to pay TV," Lowther said. "It is also a way of getting new subscribers, especially if they don't consume TV the traditional way."

Bundling most profitable business model
Agreeing, Mark Hyland, vice president of sales and marketing at Quickplay Media, noted that there was an evolution in the OTT market. He said more content providers and telcos are looking more closely at adopting multi-screen offerings.

"Operators can consider three different business models: advertisement-funded, bundled offerings or via additional subscription," said Hyland, at a separate keynote address on Thursday.

TVB in Hong Kong currently uses a model for its MyTV service which is free for users, and is supported by advertisements, the Quickplay executive noted. "This includes pre-roll, interstitials, banners and splash ads," he said. 

The "secret weapon" is bundling, Hyland added. A successful example of this is AT&T and its U-verse mobile offering. The company offers an integrated mobile and tablet app to allow consumers to download and watch TV episodes from anywhere, he said.

"Ad funded will be popular, but bundling services for operators will be most profitable [as] there is not a lot of incremental marketing expense needed, and it is able to reduce churn," said the Quickplay executive.

Lowther noted that there were still untapped markets for multi-screen. "Foxtel offers sports TV programs over the Xbox games console. It did some research and found that game console owners were likely to be sports fans who were not yet subscribers," he said.

"With multi-screen, telcos can also tap on the opportunities as a form of triple-play bundling," he added.

Topics: CommunicAsia, Hong Kong, Software

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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