Special Feature | Multiscreen Monetisation


A STUDY IN REVOLUTION


The ‘traditional’ living room TV experience has been transformed by the pervasiveness of today’s Consumer Electronic (CE) devices, and this is heavily impacting the way TV operators conduct their business strategies.


Dr Neale Foster, VP Internet Appliances, ACCESS


Operators now have an opportunity to provide multiscreen TV services that offer a broad lineup of linear and live TV channels, alongside an extensive archive of video- on-demand (VoD) and catch-up content. They can respond with a strategy that delivers content to consumers at the time, location and device of their choice, far removed from the days of single-purpose hardware.


A key question remains, however; how can operators make the most of these opportunities and earn revenues from their multiscreen services? This was an area recently addressed by IHS Screen Digest in its fascinating February 2013 Insight Report, titled ‘Unlocking and Securing Multiscreen’s Monetization Potential.’


One of the first subjects the report touched was the common assumption that the flexibility, range and availability of OTT services via companion screens and second screen devices has forced operators to react by launching pay-TV multiscreen offerings in order to avoid subscriber churn. Yet, contrary to that popular belief, there is very little solid evidence to suggest the proliferation of OTT services has instigated loss of subscriber revenues.


The IHS Screen Digest report found that the number of digital TV subscribers by operator over the last six years has, in the main,


16 | May/June 2013 | ibeconnects.com


Dr Neale Foster | ACCESS


Dr. Neale Foster, VP Internet Appliances for ACCESS, takes a closer look at a fascinating piece of research that examines Multiscreen’s monetisation potential


steadily increased, among three of the world’s largest operators (BSkyB, Verizon and TWC), while Comcast has enjoyed exponential growth during this period. This, despite the arrival of a number of key OTT content aggregators, including the likes of Netflix Watch Instantly, Lovefilm and Amazon VoD launching its services in the US and Europe over the last five years.


Another common misconception is the idea that the accessibility of OTT services discourages Pay TV subscribers from purchasing high-end, main TV packages (such as multi-room subscription), and instead generates a gradual reduction or cancellation of these services altogether. Yet if OTT services were affecting marginal advanced services, we would expect to see the total subscriber additions to reduce, with total STB net additions vastly exceeding multi-room additions, due to the reduced need to purchase or retain multi-room. Instead, the trend has not manifested itself in this way. Using the UK’s BSkyB as a case study, the report shows that the ratio of total subscriber additions to total STB additions has actually


stabilised at around at around 2:1, as illustrated in the table below.


However, the flexibility and range of viewing opportunities offered by OTT on companion and second screen devices could see this relationship change in the near future. In the last three years alone, the BBC’s iPlayer has extended its CE device compatibility to address the growing numbers of consumers demanding content beyond the set- top-box. Tablets and smartphones accounted for 31 percent of the iPlayer’s monthly views in December 2012, taking a significant proportion of the PC’s viewing share (now less than 50 percent).


Existing pay-TV operators continue to hold a clear advantage over new entrants to the market, by retaining the rights to some of the most sought after premium content, while also having the network delivery infrastructure to distribute it. Many operators are launching or planning to launch multiscreen services, not because new market entrants are affecting their revenues, but to use as an insurance policy to prevent this likelihood in the future.


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