Hybrid OTT Emerges as Top Business Model for TV Operators

MPP Global Posted by MPP Global on Monday, 27 July 2015

TV operators and content owners are favoring the hybrid OTT model over more traditional solutions.

With online accessibility and the number of mobile devices increasing, consumers are demanding more online video content. To accommodate this trend and compete with Netflix’s dominance of the market, an increasing number of TV operators and broadcasters have launched or are planning to launch OTT services this year.

OTT Business Models

In its latest research, MPP Global examines key OTT business model trends and gains exclusive insights into the views and opinions of leading operators and broadcasters across the globe.

Interestingly, the research found that hybrid models are the most popular, with 60% of operators stating this OTT model is the best fit for their business.

About the Hybrid Model

The hybrid OTT model enables content owners to offer different price packages to its customers. Pricing packages can range from paying on a TVOD (transactional video on demand) basis to signing up for a subscription (subscription video on demand).

Operators with a hybrid model can reach a range of customers, from those only willing to pay on a pay-per-view basis to those who want unlimited access to all content by purchasing a subscription.

The hybrid model has already been adopted internationally by Amazon for its Amazon Instant Video service, as well as by Hulu for its online streaming service in the United States.

The research also discovered how operators are favoring three emerging OTT pricing models.

Bundling & Unbundling for OTT

Many consumers no longer want “all you can eat” packages but instead prefer tailored and personalized bundles of content and channels they have hand-picked.

As consumers want to reduce the channels they pay for, more and more operators are now considering “skinny” TV packages in an effort to both attract larger audiences and retain subscribers.

OTT Passes

Set time period passes are a relatively new concept, with Europe’s largest Pay TV operator, Sky, using day, week and month passes for its OTT platform, NOW TV.

Offering this service enables consumers to sample the content without being tied into a contract. Using enticing pricing points, the service has effectively enabled the operator to attract new customers without cannibalizing their current services.

Video Metering

TV operators and broadcasters have recognized the opportunity in metering technology, which has already become popular within the publishing industry, with a growing number of content owners looking to introduce video metering.

Offering video metering provides consumers with limited free access to video content, based on a choice of considerations which the operator can define, such as happy hours offering free access at low usage periods.

Using video metering, operators can draw consumers in, offering free access to sample the content before being requested to sign up on a pay-per-view or subscription basis.

MPP Global Commentary

Paul Johnson, Chief Executive Officer at MPP Global, commented “This research shows how the OTT market is constantly evolving and growing.

With an increasing need to reach and attract customers and stand out from competitors, more and more TV operators are shaping their business models to accommodate consumer demands while offering a reliable revenue stream.

We can expect to see the number of OTT models continue to increase with consumers embracing the changing way they can view and pay for video content.”