Myth Busting 101: It’s (NOT) Inferior to OTT Cost and Value Experience (2017)

By Charles Cheevers, ARRIS; Michael McCluskley, Espial

There is not a week that goes by without a member of the media commenting on the way that consumers are consuming video content. Much of this discussion is around the threat to the Pay TV industry, changing viewing habits of consumers, and the increase in choice at different cost points. This threat is defined as coming from several areas:

  • The rise of Over-the-Top (OTT) video sources and the potential for choice
  • Use of the retail set-top box (STB), Smart TV, and other OTT video source and subscription based services
  • Cord Shaving from Pay TV and using OTT sources
  • Desire for à la carte video of OTT video services, applications and content
  • Overall cost of video entertainment and the growing subscriber push back on video costs
  • New non-linear viewing experiences like time shifted content, binge viewing, and follow me video services
  • The quality of the video package and relative value for money against other options
  • Re-defining Pay TV to include paid for streaming services and ‘skinny bundles’

Change is certainly happening within many facets of traditional video delivery and video content and consumption. However, this paper will review what is actually happening and which changes are potentially disrupting the Pay TV industry. We will explore how the Pay TV industry is best positioned to still be the aggregation point for the home video experience.

Consumers are always looking for ways to save money. They are much more likely to cord shave if, and only if, the overall Pay TV package is not good enough. It is this “not good enough” equation that this paper will explore to ensure that all the must have factors of the Pay TV package are not only present but strengthened going forward. This “total package” will keep consumers happy (or at least not wanting to change) with their overall home video entertainment experience.

How much is good enough to circumvent the desire for lower cost for all home services? This paper will propose suggestions for the strategy to retain and potentially grow the subscribers for Pay TV services. It will show that this strategy revolves around 5 key tenets and in particular the control point the STB gives the MSO to effect these tenets.

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