Multichannel Video Programming Distributors (MVPDs) worried about losing customers to over-the-top (OTT) video offerings should include that content as part of their pay TV packages, research from Parks Associates suggests.
The biggest reason to add OTT to pay TV is that it's what customers want, the researchers said. The second best reason is to put a crimp in competing online video services.
"Virgin Media (Nasdaq: VMED) has added a YouTube app to its EPG (electronic program guide) for its TiVo customers, answering their demand for access to online video (and) consumers are changing their video viewing habits as a result of online content and premium services and now operators are changing business models and offerings," said Brett Sappington, research director at Parks Associates in a press release.
YouTube is also aiming to be a bigger part of the TV experience--either as part of the pay TV service or as an over-the-top competitor on connected TVs and devices that connect to the TVs--because "the TV is the best place to be," said Francisco Varela, global director of platform partnerships during TV Connect opening keynote reported by Digital TV Europe. "We can't accept a limited experience for our users any longer."
The biggest problem with TV, he said, is discovering which "is better on the phone and on the tablet." To solve that, YouTube is using the TV as the primary screen and mobile as the discovery piece.
There is another qualifier for MVPDs that would put YouTube on their TV lineup: Viewers don't want to pay more for the content, and over 80 percent of viewers interested in the YouTube service want it to be free, albeit advertising-based, the Parks Associates research showed, according to a story in Home Toys.
Adding the content is something MVPDs should consider because it will not only make subscribers happy but will also put a dent into competing OTT services, said Parks Associates President Stuart Sikes.
"Connected consumer electronics, particularly smart TVs, are changing the consumer experience and creating opportunities for providers to lure subscribers away from OTT," Sikes said in the Home Toys article.
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