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Video strategies and the role of pay-TV providers versus OTT players

Martin Scott Principal Analyst, Research

What is the market opportunity for traditional pay-TV, IPTV and OTT video services?

This latest video offers insights into the issues around content rights, value-chain involvement and multi-screen video consumption.

Video interview

Martin Scott, Principal Analyst at Analysys Mason and Lead Analyst for the Video Strategies programme, shares the latest research about the role of pay-TV providers and OTT players in the video services value chain and assesses different player strategies.


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Video interview

I'm going to talk a little bit about some of the larger trends in the interaction between traditional pay-TV players and OTT video players. 

Can pay-TV providers compete with OTT video providers? 

The first question I'd like to explore is what pay-TV providers should focus on when thinking about competing with OTT video providers. 

The first point I think is about original content investments. How much should an operator invest? Should they invest?

I think there are options for every potential budget. But one thing to bear in mind is that the same rules do not apply to the OTT players as they do operators. 

These are different business models that have different performance metrics as their priorities.

An OTT provider is more interested potentially in market cap than they are tied to profit margins and revenue reporting. 

This therefore gives an extra maneuverability when competing against operators. 

I suggested the best approach for operators therefore is to invest in a platform that allows for the integration of all of these video services under a single interface that they control and curate.

I think in all of this we really need to be thinking about what YouTube are up to.  

So in our recent consumer smartphone analytics research we found that 78 percent of all smartphone users in a panel of users from across North America, Europe and Asia were using the YouTube app. That's massive. 

What is the future of Google's and YouTube's role in TV and over-the-top TV 

So the next question to think about is what is the future of Google's and YouTube's role in TV and over-the-top TV. 

The YouTube TV application and service was launched in April 2017. I think one of the critical things for the success of YouTube TV is going to be them rolling out universal availability. 

The reason that the free YouTube service is so successful is because everyone uses it. At the moment YouTube TV is restricted specifically to certain US regional areas and I think that until that changes, which is dependent upon content rights, YouTube is not going to be a massive disruptor in the paid-for video space. 

What's going to be really important about he future of YouTube TV is how they promote and and tie the paid-for-service to recommendations within the free service. 

I think that typing in searching for things in the free YouTube service will be a big factor in pushing people over to the paid-for service. 

How well are multi-screen services performing and operator propositions performing relative to OTT?

The third question when thinking about the interaction between the operator and OTT services that we need to think about is how well are multi-screen services performing and operator propositions performing relative to OTT.  My answer is actually, surprisingly well!

In the UK, a typical multi-screen service such as that offered by BT or by Sky has an average session duration of 10.1 minutes per session where the app is open. That compares to 10.2 minutes for the average Netflix session. 

How do operaters further increase this engagement? Well, I think looking at the user experience and user interface designs that come with these leading apps such as Netflix is really, really important.

I think that lots of multi-screen services can learn more from these interfaces and I also feel that the big edge that operator services have is the amount of live streaming content and the amount of TV channels they have. 

So I think that positioning live streaming as an integrated part of the user interface, equally as prominent as on-demand content is really important and a key differentiator.