The growth in the range of online video options available to consumers shows no sign of abating in the near future. Most connected consumers are now engaging on a daily basis with free services such as YouTube, Facebook Video, and broadcasters' catch-up offerings. Additionally, paid online video households typically subscribe to more than one service, with the propensity for multiple subscriptions higher among pay-TV households. Both the fragmentation of video entertainment consumption and the proliferation of content and service options make for a disjointed user experience, particularly where multiple subscriptions – along with the associated login/authentication and device compatibility issues – are concerned.
This presents substantial challenges for OTT players and network operators alike, but also a significant opportunity for operators to diversify their traditional portfolios by partnering to integrate third-party apps into their delivery platforms.
Figure 1: Operators' multiple OTT video service integrations
Our primary research reveals clear interest among consumers both in accessing OTT video via their TV sets and in having the option to subscribe to paid online video services as part of their mobile plans. For a few years now, operators have been tapping into this latent demand for more seamless access to OTT video, typically by partnering to offer the more popular third-party SVOD subscriptions via their own branded UIs or, less commonly, as part of a service bundle. Interestingly, it is telcos – primarily MNOs – rather than traditional pay-TV operators that have led the way in partnering to offer third-party paid online video services to their customers. But the bulk of mobile-only partnerships have been based on marketing alliances rather than service integrations, with little in the way of tariff bundling and only a handful of players aggregating multiple OTT partner services into proprietary entertainment portals. What really drives mobile as the primary delivery channel for partnered OTT video services is direct carrier billing and the convenience of having a single point of signing up and paying for multiple digital media services.
But the ubiquitous mobile channel does not necessarily address the challenge of providing seamless access to multiple video services – something of particular importance to those paying for and consuming premium, long-form programming. This is a sweet spot for network operators offering video services via set-top boxes (STBs) or media streaming devices – and one that network-agnostic aggregation propositions in the form of Amazon Channels, Apple TV Channels, and a multitude of retail streaming boxes are also targeting. Among "traditional" pay-TV service providers, so far only Comcast and Virgin Media have shown significant inclination to integrate multiple paid online video partners into their video platforms. Although the recent spate of STB integrations from the likes of Charter, Sky, and Telefonica is a step in the right direction, operators must be more open to aggregating a handful of OTT partners into their TV mix, including the obvious big names (e.g. Amazon, Netflix, Fox, and HBO), plus some more niche options such as sports/eSports and local SVOD/SLIN providers.
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