Finance

Operators Should Embrace SVOD to Attract Next Generation

Parks Associates, Hub Research say promotions, set-top integration can go a long way 2/12/2018 1:49 PM Eastern
Brett Sappington, Parks Associates senior director of research (l.), and Hub Entertainment Research president Peter Fondulas urged NCTC members to integrate SVOD services into their product line-ups.

SAN ANTONIO, Texas -- Operators should embrace subscription video-on-demand services, making it easier for younger viewers to access their Netflix, Amazon Prime Video or Hulu subscriptions, a duo of researchers told attendees at the NCTC Winter Educational Conference here Monday.

Parks Associates senior director of research Brett Sappington noted that most users of SVOD services like Netflix, Amazon and Hulu are younger (aged 25-34) and have been in their homes less than 12 months, adding that people who have SVOD subscriptions also have some form of pay TV service.

Sappington said the fastest segment among video consumers are households that are taking two, three and four services, so they aren’t averse to paying for content, they just don’t want to pay or what they don’t want.

“People that love video pay for video,” Sappington said.

Read More: Additional Coverage of the NCTC Winter Educational Conference

Hub Entertainment Research president Peter Fondulas pointed out that SVOD usage is growing as well as the number of services they use. But according to Hub’s research, live TV is still the first thing that most viewers turn on when they want to watch content. According to Hub’s research, 47% of respondents went to live TV first, followed by Netflix (19%) and the DVR (13%).

Pay TV distributors can tap into the younger SVOD market in several ways, he added. Partnering with SVOD providers through promotions – offering six months of free Netflix, for example – is the easiest. Next is actively selling a service alongside of or as a replacement for existing service – like Amazon is doing with Amazon Channels – followed by bundling an SVOD product with broadband or integrating SVOD apps into set-top boxes.

Sappington said that distributors should be open to forming partnerships with SVOD providers, as well as leveraging industry innovation; tying tech products like TiVo or Roku to their brands will uniquely address customer needs.

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Fondulas said another plus would be making more episodes and seasons available for binge watching, as well as making it easier for customers to find shows they might like.

“People worry that there are shows they will love that they’ve never heard about,” Fondulas said. “This is creating opportunities for companies that can aggregate across sources. Pay TV operators are already taking advantage of the opportunity.”

He noted Comcast’s and Cox Communications’ moves to integrate the Netflix app into their set-tops, adding that other ways to attract the next generation of viewers is to offer slimmed down bundles of programming to address content proliferation, as well as considering incorporating other online platforms into the set-top to keep viewers in the ecosystem.

“Pay TV is not dead,” Fondulas said.     

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