Report: OTT Platforms Not Yet Adequate Alternatives to Pay TV

LONDON: U.K.-based research firm Ovum has issued new analysis on over-the-top TV platforms, finding that they still have a long way to go before they can serve as adequate alternatives to traditional pay-TV services.

“While we expect OTT to become increasingly integral to the home video entertainment mix, there’s little evidence yet of consumers dropping their pay-TV subscriptions in favor of purely operator-independent solutions,” said Jonathan Doran, the principal analyst at Ovum. “For the time being, OTT will remain a complement rather than an alternative to pay TV.”

Ovum’s research found that half of British consumers who own Internet-connected devices—PCs, tablets, consoles, smartphones and smart TVs—are using OTT services, and more than half of that base have retained their traditional pay-TV subscriptions.

Ovum does, however, note that some OTT services—notably LOVEFiLM and YouTube, backed by the strength of their parent companies (Amazon and Google, respectively)—have the potential to substantially improve their positioning in the market. The research also found that pay-TV providers and OTT platforms should work together. “For their mutual benefit we believe it is paramount for operators and OTT players to collaborate, yet we have seen little evidence of this to date, with the notable exceptions of Xbox Live and Samsung,” Doran said.

He concluded, “As competition in the TV services market hots up, there is a crucial need for clarity and guidance for all those involved. While traditional service providers must understand how new entrants are threatening their established revenue streams, OTT players also need greater direction to leverage partnerships that will enable them to deliver quality experiences, attract loyal consumers, and ultimately make money from TV services."