Industry in Transition: A Recap From the Pay TV Show

Past Telogical Talks

Welcome to Telogical Talk, a weekly series where we analyze a slice of the competitive intelligence data collected by the Telogical research team.

At the inaugural Pay TV Show hosted by Fierce Cable in Denver earlier this week, industry players ranging from grizzled-veteran operators to fresh-faced entrants in the OTT space agreed on one thing: 

Give the customers what they want. 

That's pretty much where the agreement ended, as each stakeholder had a different idea about how to achieve that goal. This Telogical Talk highlights a few of the big themes (and contradictions) that emerged from the show. First up-- 

Deliver a great user experience

All speakers expressed desire to "reduce friction," make content easy to find, and create a great UX, but Hulu got specific, sharing how it designed its Hulu Live vMVPD product a year ago based on the idea that each customer should have a personalized experience.

Ben Smith announced new Hulu features rolling out on May 22. 

Move to a marketplace of choice

While traditional operators have made inroads with partnerships (e.g. integrating Netflix on IP-enabled set-top boxes), Amazon dominated the conversation of a "marketplace" that allowed customers to choose channels for themselves. In a fireside chat, Richard Au expressed openness to a similar integration with traditional providers. Kathy Payne, a former cable exec now leading Amazon's content acquisition, concluded its à la carte model creates the most satisfied customers. One analyst estimated Amazon's marketplace currently sources 55% of D2C video subscriptions.

L to R: Steven Sklar, CenturyLink; Mike Keyserling, Philo; Kathy Payne, Amazon; Roger Seiken, WOW!

L to R: Steven Sklar, CenturyLink; Mike Keyserling, Philo; Kathy Payne, Amazon; Roger Seiken, WOW!

Create value through content aggregation

Although some consumers self-aggregate video content from a variety of sources, the traditional role of creating value through a bundle has not been abandoned by the industry. Indeed, in the OTT space, the presence of vMVPD providers offering "skinny" bundles (Philo) or featuring sports content (FuboTV) reinforces the notion that customers value packages. However, the elephant in the room remained: programming expenses, especially from broadcast retrans fees and regional sports networks, make the economics of providing video bundles perilously difficult. When assessing vMVPD services, one analyst stated skeptically, "They're all losing money." Meanwhile, programmers continue to shift content onto D2C platforms, further diluting the value of the traditional networks in a bundle. 

Telogical Systems at the  Pay TV Show . L to R: Andrew Woessner, Ashley Brazeal, and Michael Buening

Telogical Systems at the Pay TV Show. L to R: Andrew Woessner, Ashley Brazeal, and Michael Buening

The Pay TV Show featured discussions about an industry undergoing a major transformation. While pay TV has experienced a decline in subscribers over the past few years, video viewership remains robust. The appetite for the product is there, but the business is currently refreshing its menu and figuring out how best to serve its customers.

At Telogical, we’re always studying the competitive landscape. If you have a topic you’d like to discuss with us, please reach out. We look forward to working with you.

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