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Viewers multi-screen consumption is a boost for TV and OTT subscription business

Video subscription once built will give the content business better assurance of revenue even in hard times. This stands true for any direct-to-consumer subscription business, that is one of the primary reasons all marketers attract consumers to opt for the subscription fees model and work toward retaining and upselling. This model prevails across industries like food delivery platforms, edu-learning management, newspapers, travel and leisure, and many more.

Nowadays, viewers consume content either solo or with family on different gadgets-TV, portable, tablet, etc. The distribution outlook should optimize reach and revenue.

TV subscription. Subscription addition – Identify a correct mix of content, price, and markets to upsell pay TV content to free TV homes estimated to be ~ 25 percent of current TV homes. Over years 20-35 percent of non-TV will get added to the overall pay TV selling potential. The TV subscription business is at a mature stage of the product lifecycle it is necessary to have a turnaround to revive and look to find a new growth path by implementing value adds. TV everywhere service is driving strong partnership with affiliates and upsell viewers TV on a go with multi-screens. Exclusive Ad fee content can be evaluated and partnered using fiber channels where broadcasters and the affiliate foresee get a critical mass

OTT subscription. The key value the viewer derives from OTT player is on-demand differential content, 100 percent screen view with ad-free experience, not even with a channel logo appears the platform tags is a light color watermark at the lower bottom of the screen. Business strategy is a mix of both direct consumers and partnership. As in the introductory stage of the product lifecycle, it is interesting to see the distribution strategy outlook once OTT penetrates and viewers get habituated in the last 1 year with a massive growth of 90 percent in OTT subscribers pushing it toward the growth stage. Pay OTT will get some subs from cord-cutting and non-TV homes, but most pay subs will have both TV and OTT services for self and family viewing. It will also have churn as the viewer will lookout for a cost- content -value by TVoD, SVoD, and compare it with liner TV viewing price and experience. The distribution cost for an OTT completely depends on the telcos data plans which is more than the affiliate distribution cost in the pay TV ecosystem. This can lead telcos to become content aggregators and OTT players may get over 60-70 percent subscribers through partnership.

Video content subscription fees with bundling or unbundling strategy
Satellite pay TV. Broadcasters’ ad sales revenue contribution is much higher than distribution which is driving both reach and revenue. Regulated price caps on bouquets can the market attempt to sell strong channels on à-la-carte to viewers and balance the business tradeoff between ad-sales and subscription revenues. Viewers subscribe to channel brands and watch only limited preferred content if the channel fulfills their preferred needs, they will not unsubscribe and keep the service irrespective of the limited viewing.

Pay OTT. Content bundled with telcos has helped OTT to reach critical mass. Powerful brands with diverse originals, sports, and appealing content offerings have established the direct-to-consumer model. Subs upside is visible once more regional content added to OTT platforms. Structured TVoD is offering to upsell originals and make new language base bundles offerings by platforms to attract the price-sensitive audience.

Co-existence of OTT and TV subscription. The industry should make a common measurement matrix to evaluate OTT and TV viewership, so content creators can segment viewers using TV viewership and OTT platforms’ consumption data. This will help everyone in the ecosystem to understand their viewers and genre preference on TV and pay OTT space.

Over the long run pay OTT and TV co-exist once viewer segments, consumer preference, pricing, distribution strategy, and regulations are clear. There is enough headroom for pay OTT and pay TV to grow together and increase their overall video subscription revenue share.

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