DIGITAL-FIRST PAY-TV: FOUR TAKEAWAYS
Pay-TV is going through a significant change as the market adapts to new consumption models and competitors. Operators have responded in a variety of ways, but so far, no consensus has emerged as to which models work, when they work, or why. Organizations who pivot to a digital-first approach — specifically, thinking from a converged broadcast and OTT perspective — not only create opportunities for themselves but can also respond more effectively to capitalize on them.
Deutsche Telekom (DT) and Orbit Showtime Network (OSN) are two companies that have been through this second stage of digital transformation. I recently had the pleasure of joining executives from both companies for a round-table discussion on this topic (you can listen to the conversation right here). As we explored their own experiences and recommendations, we identified four key digital-first responses:
- Super-aggregation: For DT (8:39), aggregation allows operators to provide content-centric rather than provider-centric products, making content discovery easier via better user experiences such as one-click to subscribe and unsubscribe to services. OSN emphasized (13:18) the role of operators in terms of bundling content into packages, providing metadata aggregation, and providing a unique discovery experience.
- Digital-first branding strategies: A key decision for operators is whether to use a unique brand for their online product (i.e. become a virtual operator) or leverage an existing brand. For DT (17:41), the trade-offs depend on the position of the existing brand in each market, which for them typically resulted in using a second brand but positioning it as entry level to preserve the existing brand’s high-end status. However, this depended on leveraging shared technology and shared solutions, differentiating the brands only in terms of UI and pricing. In addition (23:09), DT doesn’t see consumers caring about the delivery mechanism (OTT, cable, etc.) — they care about the product and the experience. For OSN (19:55), a key consideration is whether your brand is seen by the market as being a strong content brand. At OSN, they tried a second brand (called Wavo), but realized this approach didn’t work given the OSN brand carried strong content associations. Peter Riz, CTO at OSN, highlighted a second consideration too, that the lower recognition of a new brand makes it harder for consumers to find your service in mobile and TV app stores.
- Operator relationships with local content providers: In many markets, international content providers are struggling to balance the localization of content with the need for international scale (24:44). For DT (25:40), with only finite viewing time in a day, local content will inevitably lose share against new content sources, but a new balance will be found. Meanwhile at OSN (29:54), they see the positive impact local content can have on your brand, and the opportunities it creates for unique promotion and social media campaigns.
- The use of the cloud to transform businesses: The discussion surrounded the opportunities created by using a converged, digital-first technology platform. DT is a multi-country provider, running multiple network types, and so for them cloud-based technologies allow for a single platform for multiple countries (34:30). This creates efficiencies from being able to build and monitor while deploying everywhere without losing the ability to localize. Peter Riz echoed this point (39:59), highlighting that the cloud’s software-centric nature is key, since it makes service features programmable, and it is this programmability that allows for centralization without compromising localization. However, Peter also highlighted that this depends on having the right architecture (41:09) — just moving the same stack to the cloud will likely result in a failed transformation. Instead, you should look to individually programmable microservices.
Both panelists had some final words of advice worth considering. For Peter, the message was simple — maintain your focus (45:44) and learn from each step, since you can’t hope to follow all the changes in such a rapidly evolving market. Pedro highlighted the use of aggregated data to provide a holistic view across your service (47:27). He also highlighted the need to decouple the user experience from the technology, allowing you to evolve the technology without negatively impacting the consumer.
The Cloud TV Suite from Comcast Technology Solutions provides the ideal platform for these kinds of digital-first transformations.