-Skinny OTT Bundles Won’t Threaten Pay TV Biz
-User Experience and Design Are Key Elements to Success
Piksel provides an end-to-end online video solution for media companies looking to launch Internet video services. With DirecTV, Dish Networks, Verizon and others launching OTT products this year, it’s a service that is in high demand as media companies and content rights holders are focused on launching OTT products. Piksel’s clients include AT&T, Samsung, satco Sky, Liberty Global, UK’s Channel 4 and Channel 5, Sky Deutschland and Mediaset.
Middle East’s OSN: not stumped by OTT service
Piksel believes OTT products such as Dish Networks’ Sling TV service, can be additive to a traditional pay TV business. One of Piksel’s clients, leading pay TV network in the Middle East and Africa OSN, has seen great success in launching an OTT service.
“They launched a pared-down [pay TV] package and they did not lose any subscribers, and they did not see a noticeable drop in the subscriber growth,” said Jody Stark, global head of commercial sales at Piksel. “They did, however, see a noticeable increase in picking up these packages.”
Stark spoke on a panel at CES earlier this year. “I think that is the way to the future, and will grow the overall size of the pie,” he said. “To see the Dishes and Verizons doing it, I think it’s fantastic.”
Stark said traditional pay TV networks and providers will need to update their services in order to more effectively compete for subscribers who are now able to build their own entertainment “bundles” via Internet TV services.
“We’re going to see cable TV companies, satellite TV companies and others getting really specific and working really hard for your dollar,” Stark said. He added that these companies will focus on improving the user experience of their respective services. “They have to, and they’re going to focus a lot on design, and how that user experience and user inference works.”
“The absolute key to this is the consumer experience, that’s how it’s going to change,” Stark said.
Traditional media companies are “spending significant R&D dollars” developing interfaces and experiences that are hyper-personalized and that enable viewers to move seamless from screen to screen.
Pay TV companies aren’t the only ones interested in launching Internet TV services. Stark said Piksel is seeing more digital native media companies, like the ones that have made successful businesses on YouTube looking to launch OTT services.
“A lot of our business over the last twelve months has been these multi-channel networks (MCNs) from YouTube coming in and saying, ‘Look, it’s a great fantastic service, we love it, but they are taking forty percent of our money,’” he said. These MCNs are now large enough, both in terms of eyeballs and revenue, to think about expanding off YouTube and launching their own respective Internet TV channels.
“The take we have on it is, come to a platform like ours and develop your own service, and maintain your relationship with YouTube because it’s the world’s best marketing platform,” Stark said.
MCNs have large audiences among Millennials and, importantly, cord nevers — the viewers that …
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