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Cable Technology Feature Article

November 29, 2011

Pay-TV Operators Must Adapt to Changing Environment

By Ashok Bindra, TMCnet Contributor

According to the independent telecoms analyst firm Ovum (News - Alert), changes in market conditions and consumer behavior are forcing dramatic shifts and an uncertain future for the pay-TV industry. In its latest report, the telecom research firm states that new technologies and players offering alternative ways to view video are undermining the established order of pay-TV operations.

The Ovum study also indicates that pay-TV subscriber growth is slowing in several markets, with free-to-air digital TV and web-based offerings luring consumers away from traditional pay-TV services.

In a statement, Jonathan Doran, Ovum principal analyst and author of the report, commented, “While these changes have already started to occur, their impact will become increasingly pronounced over the next five years. This will force a shift in the strategic approaches of pay-TV operators if they are to ensure their continued success and survival.”

Furthermore, he added, “In isolation, none of the challenges faced by traditional pay-TV operators present an insurmountable barrier. Many operators have demonstrated their ability to fight back against these threats by rapidly adapting to the changing environment and turning challenges to their advantage. However, when combined, these disruptive factors represent an evolution in the TV market landscape that cannot be reversed.”

To help pay-TV players survive these significant shifts in the environment, Ovum’s report offers several recommendations. For instance, it advises operators to review existing approaches to content packaging so as to ensure that they are providing choice and quality to consumers.

Doran said, “To offset the increasing homogeneity of TV offerings, operators must adapt their portfolios through creative and shrewd packaging and pricing initiatives.” “Service providers will need to continually review and revise their content offerings in order to accommodate consumers’ evolving and increasingly fragmented preferences.”

Additionally, the report also advises players to exploit triple-play opportunities, employ new user-experience enhancements, and emulate and outdo competition from adjacent operators.

“Where possible, operators should strive to exceed the levels of choice, flexibility, and personalization offered by their Internet-based competitors. This will involve developing services that resemble open, web-delivered offerings, while at the same time differentiating from over-the-top players based on service quality, reliability, and device interoperability,” asserted Doran.

Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell