Are streaming and traditional pay-TV options locked in a fight to the death?
Many seem to assume so.
But as we enter a new decade, the ability to entertain different views, potential models and outcomes will continue to be the most valuable business skill of all.
Proceeding on that premise, here’s an interesting take from Jean-Marc Racine, chief product officer at video solutions provider Synamedia. Granted, Synamedia tends to focus on linear pay TV, but trying to look at the world from that perspective is kind of the point in this case.
Racine believes that “the cross-service TV bundle will move center stage, as the perceived wisdom that cord cutting is decimating the traditional pay-TV sector will prove false.”
Why? “With the world’s media powerhouses launching streaming services into an already crowded market, consumers will be confronted with too many siloed options,” he argues. “Many services won’t survive. And some cord cutters, tired of searching, may ultimately watch less. To avoid this fate, traditional pay-TV [companies] and new players will join forces to offer a converged, curated ‘new pay-TV bundle’ to meet consumer demand.”
Perhaps not so contrarian, really. While some in the thick of the battle may lose sight of this reality, consumers couldn’t care less about who they’re paying. What they’re craving is an easy, centralized and affordable way to access and pay for all the content they want.
Whether cross-service pay-TV bundles will prevail as a model when the smoke clears is one of the many big unknowns, but it’s clear that alliances between rivals are already being forged for reasons of simple self-interest. (The old “hang together or hang separately” logic.)
Look at Netflix’s successful (at least for the present) strategy of expanding globally via set-top-box integration partnerships and carriage deals with major pay-TV operators around the world. Or consider that most pay-TV operators around the world agree that pay-TV “super aggregator” platforms will emerge as an important force over the next few years. Or for that matter, that HBO Max will soon be co-existing with HBO (though no one knows how well, or how long).
Racine also expects heightened cooperation on the addressable advertising front.
“We expect to see new ecosystems and partnerships boost the growing demand for linear TV addressable advertising,” he says. “This will include more pay-TV operator and broadcaster collaborations based on sharing advanced advertising platforms and audience data to create solutions matching the needs of advertisers and agencies.”
His codicil — that the whole industry will also need to work together to define a standard way of measuring addressable advertising audiences and outcomes — is of course far from contrarian.
Racine also stresses that achieving synchronized latency between live broadcast and OTT streaming at scale will become a must as live sports streaming goes mainstream.
“This will require the entire end-to-end chain to be optimized for low latency,” he points out. “Using a low-delay encoder is a moot point if the CDN platform and player introduce delays down the line. Operators will also start to converge their broadcast and IP streams at the head end to help minimize any delay and optimize their workflows. And we’ll see a flurry of activity around ATSC 3.0 as U.S. broadcasters prepare the technical, commercial and legal ground for rollouts that will open up new application opportunities.”
And while being liberal about allowing the sharing of pay-service passwords may at present be considered necessary for growth purposes by new streamers, in particular, Racine thinks that all paid-service players will also cooperate on this issue sooner rather than later.
“We will see the industry raise the volume about the toxicity of streaming piracy and fraudulent, for-profit credentials sharing,” he predicts. “While individual operators facing severe piracy situations are already calling for more to be done to combat pirates, we are only at the start of this battle to protect both the value of premium content and operator revenues.”