Special Report: The Future of the U.S. Pay-TV Market

Earlier this summer, the Pay-TV Innovation Forum hosted a seminar in New York, bringing together senior U.S. industry executives from leading pay-TV providers, broadcasters, OTT services, rights holders and technology suppliers for a roundtable discussion about the prospects for the industry during the 2020s. Hosted by NAGRA and chaired by MTM, participants included senior executives from A&E Networks, Altice USA, AMC Networks, AT&T, Charter, Dish Network, Disney, fuboTV, HBO, Showtime, Verizon, Viacom and other leading industry participants.

The discussions explored a wide range of themes and issues, from the future of the U.S. pay-TV market through to exploring the opportunities in next-generation aggregation.

When asked about the key trends that are having the most significant impact on the industry, Hannah Brown, Chief Strategy Officer at fubuTV noted, We we are seeing new entrants come to the market with digitally or OTT delivered services - which are allowing consumers for the first time to make an independent choice about whether they take pay-TV bundled together with their broadband or in an area where satellite was really the only feasible way for them to get pay television - and now there is a number services - of which FubuTV is one - who are coming to market and offering an Internet premium pay- TV service.

Emphasis on the customer continued with Sean Robertson, General Manager, Partnerships at DISH Network, who shared his views on the segmentation trend in the U.S. pay-TV market, and the upcoming consolidation between providers and content creators. According to Robertson, the biggest takeaway from the U.S. Seminar is, You have to listen to the consumer.

Robertson continued, From all the big companies that represented today and all the smart brains in the room, we heard a slew and a variety of different answers. His conclusion, There is no one right answer.

You have to have your eyes and ears open. You have to be willing to partner, and everybody's going to have to make some concessions. Be smart in how you're thinking about your business one year, five years and 10 year from now. The consumers are here, and they want content - that much we know. It's up to us to be innovative and to be reasonable about how we are going to look at our business and consider the needs of the consumer at the end of the day - that is most important part of this entire ecosystem.

The result of this forum was released in the Key Takeaways from the Pay-TV Innovation Forums U.S Seminar report. This report unveiled the challenges, opportunities and priorities that are driving the future of the U.S. pay-TV market.

Although perspectives varied widely, attendees expressed tentative optimism that the industry can successfully adapt to the evolving market landscape and changing consumer needs. For example, many U.S. executives are remaining cautiously optimistic. However, the industry needs to adapt through restructuring and re-thinking pay-TV packaging, while also incorporating OTT. In addition, content provider distribution strategies are becoming more diverse, as direct-to-consumer services continue to create new opportunities - and challenges.

Many participating executives also believe the industry is approaching peak investment in content. As result, consolidation, competition and commercial pressures will impact future spending. In line with this information, advanced analytics are widely perceived to have emerged as a critical enabling capability, but effective deployment remains challenging - platforms need upgrading, new approaches and business processes need to be introduced, and investment costs can be significant.

It is not surprising that there are significant changes and growing pressures for the U.S. market - and they vary depending on the role you play in the M&E workflow. The Forum uncovered five key findings that the pay-TV industry must consider as it looks to adapt. They are:

Executives are cautiously optimistic about the ability of pay-TV providers to adapt.

Executives remain uncertain about the impact of major new DTC OTT services on the pay-TV industry.

Pay-TV packages will be re-structured and content providers will need to adapt their distribution strategies accordingly.

The industry could be approaching peak investment in programming, as content providers re-think their distribution strategies.

The proliferation of connected platforms and devices creates distribution opportunities for new entrants but could usher in a new wave of aggregators.

While perspectives among U.S. seminar participants might have varied from person to person, Brown summarized the general consensus from the event in stating, Pay TV is here to stay. Customers are going to continue to look to their content providers to aggregate the very best content they can into efficient bundles that they value. And, that we all have the responsibility to deliver that content in most robust way that we can onto the platforms where our customer are.

A more in-depth look at the details, takeaways and market statistics behind these findings can be accessed by downloading the U.S. edition of the 2019 Pay-TV Innovation Forum findings.

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