Standalone OTT from Pay TV is about to become a trend

Pure-play OTT services from Pay TV operators that give non-traditional customers the chance to subscribe to services on low-cost and low commitment packages, are going to become a major feature of the TV landscape. That is the opinion of Michael Lantz, CEO at Accedo, a leading developer of multiscreen apps including for TV Everywhere. His company helped Sky Deutschland launch the new Snap service in Germany, which is an SVOD service in the Netflix, Amazon and Maxdome style. But he points to NOW TV from BSkyB in the UK as an example of how standalone OTT Pay TV offers that begin with movies can evolve into balanced bouquets offering linear and live TV, including sports and general entertainment.

Accedo is currently working on ten projects to help Pay TV operators build services that are similar to NOW TV and Snap. He thinks this kind of service launch will become a significant trend in the industry, and he expects many operators to be far more aggressive than BSkyB has been with its NOW TV offer. “NOW TV is a fairly defensive play but I think other operators in Europe will be more pushy in terms of going after market share with these kinds of services.

“Operators are not going to let someone like Netflix cannibalize their market. They want to compete on even terms and it is time for the Pay TV industry to fight back, using their content agreements,” he explains. “There is definitely an opportunity to counter the marketing muscle of Netflix. There are so many operators around the world looking at what Sky in the UK and Sky Deutschland have been doing.”

Lantz expects to see a mix of business models, from the Netflix-style SVOD offer to what is referred to as ‘Pay TV Lite’, where you get a mix of VOD and linear with different content genres.  Often the first will evolve into the second, as it did with NOW TV, as platform operators acquire more content rights and then add extra features to expand the service, he suggests. He thinks a later stage of evolution, which will come when these services start counting their subscribers in millions, will be to provide more pricing tiers.

Lantz agrees with predictions, like the one from Guy Bisson, Research Director at IHS Screen Digest, that this kind of service can act as an insurance policy for platform operators who need to be ready for any long-term migration towards Internet delivered TV. “Some operators take the view that if they do not have this kind of service, someone else will come in and take their subscribers. It is definitely a long-term strategy,” Lantz says.

He is surprised that U.S. cable operators are not pursuing the standalone OTT service model, reaching beyond their own footprints, but has no doubt that this is an emerging trend for Europe.

Lantz believes we will see platform operators marketing their own OTT set-top boxes and going to market as an app on other devices, with some doing both. He thinks a desire to have more control over the Quality of Experience, particularly when delivering to the television set, and the marketing benefit of a dedicated device, are the factors that would persuade operators to introduce their own OTT set-tops.

“We see a higher willingness to use dedicated devices among consumers,” he says. “Currently it is easier for consumers to understand that from this device, you get this service. I think that will disappear over time and people will get used to having multiple services from one device, but right now the mass-market consumer finds that idea too complex.”