The slowdown in pay TV growth worries the sector. The emergence of strong price competition, the expansion of offers and more demanding content and subscribers have combined a complex outlook for the sector. The panel “Challenges of the programmatic offer on pay TV”, held within the framework of the ATVC International Conference 2021, reflected these concerns.
Gonzalo Arrisueño, Content and Programming Manager of Telefónica Hispanoamérica, detected that "few content providers can say that their focus is pay TV, although, on the contrary, their income is this service." Arrisueño warned that "competition continues to be fierce in the sector, although it is also the proliferation of OTTs, which are not necessarily complementary." The executive pointed out that "the heart of this industry, content, has registered the most relevant decrease in pay TV, in the face of a traditional window that ceased to exist." Thus, he indicated that even international sports no longer have an exclusive window for pay TV.
This new ecosystem that seeks its balance has resulted in a drop in ARPU. "We must lower prices due to competition, but the reason is that pay TV is no longer the driver for contracting packages of a convergent offer," he said, remarking that this role has passed to broadband to consume video.
“If we want to extend the life of pay TV, programming costs must decrease. Operators are not going to pay for the two parties in hard currency in many territories and promote OTTs in our connectivity offers,” Arrisueño warned.
According to Federico Canónigo, Content and Programming Manager at Telecom Argentina, the sector has not yet developed a business model that responds to changes in consumer habits. "We see Telecom / Flow as a meeting point because there are a hundred OTT platforms," ??he said. Canónigo stressed that when a subscriber ends a series, they are uncertain about what to continue watching. "We are working very hard on search engines, algorithms and recommendation engines for users," he highlighted to illustrate the company's initiative to retain customers.
Cristian Novoa, Content and Advertising Manager of VTR, from Chile, observed that “the business model operated in a sustainable and stable manner, but in the last five years, with the arrival of new players, new consumption patterns have been unblocked and they have generated new needs in customers, and with it an increase in the volume of content and quality on demand.” Nevertheless, Novoa also credits a slowdown in the growth of operations and an intensification of competition.
Sergio Veiga, host of the panel and president of CAPPSA, concluded by stating that one possibility for the future of pay TV is with an improvement in the value proposition and pointed towards an expansion of digital rights and nPVR capabilities because they broaden the experience of consumption.