Media Execs See OTT Video as Supplementing – Not Replacing – Pay TV

September 3, 2013

This article is included in these additional categories:

Broadcast & Cable | Digital | Television

StreamingMedia-OTT-Challenge-to-Pay-TV-Sept2013Media industry executives feel that over-the-top (OTT) video services such as Netflix are more likely to lead to cord-shaving than cord-cutting behavior, according to [download page] a recent report from Among the 758 executives surveyed, 51% said they believe that consumers are responding to the emergence of pure OTT video services by cutting back on their pay-TV channel packages and supplementing them with OTT content. By comparison, 23% feel that consumers are responding by canceling their traditional pay-TV subscriptions in favor of OTT video.

Netflix subscribers themselves appear to hew more closely to the former view, at least when it comes to content consumption. Last year, a GfK study found Netflix users saying that their regular TV content consumption was unaffected by their subscription. In a more recent study, GfK discovered that a majority of Netflix users said that they watch less premium cable as a result of their subscription.

Interestingly, the study finds that pay-TV operators are far less likely to believe that consumers will cut the cord due to the emergence of OTT video. Just 5% of pay-TV operators responding to the survey believe that’s the case, compared to 22% of technology vendors and 25% of content providers. Instead, pay-TV operators are more likely to believe that consumers are responding to OTT video by cutting back on channel packages.

So how will OTT video services be delivered in 5 years’ time? 39% of pay-TV operators think that they will be part of existing pay-TV subscriptions, compared to 32% of technology vendors and 19% of content providers. Each group is more likely to believe that successful OTT video services will be delivered as standalone services, though.

Respondents also feel that in 5 years’ time, the most successful OTT revenue model will be a monthly subscription (46%), with advertising/sponsor-supported (42%) and pay-as-you-go (38%) models also seeing some backing. Fewer see OTT’s most successful model as a value-added service as part of a TV subscription (30%) or as an additional charge on top of a TV subscription (12%).

About the Data: 38% of respondents are content providers, 31% are technology partners/vendors, and 6% are pay-TV operators. 78% are based in North America, and 13% are in Europe.

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