Trend Watch: Cable Operators Now Deviating From Tiered Content Packages

Over the past few years, cable operators have been struggling to figure out what to make of the over-the-top (OTT) video trend. Questions abound: Is OTT content a viable substitute for traditional, tiered—or grouped—channel packages? Can the two models operate side by side?

Opinions on OTT content will vary greatly amongst different cable operators. In light of the widespread confusion surrounding OTT content, however, the general consensus over the past few years has been that it most likely would never replace tiered content. OTT was always thought to be a supplementary service incapable of challenging the likes of lineups featuring ESPN, HBO, AMC, FOX and other heavyweights.

Now, however, this attitude appears to be changing as we are seeing a growing number of cable operators dropping select channels from OTT offerings, choosing instead to provide them through OTT-based Roku delivery models.

The reason for this ultimately boils down to costs and availability. Several channels now offer live streaming services which allow their broadband partners’ subscribers to log in and access content using their broadband credentials over a Web browser, on any device. As a result of this type of flexible, on demand service, cable operators are realizing that it doesn’t make sense to offer a channel both in a tiered group, and online. Therefore, many operators are instead offering access to select channels via Roku-style devices which make it easier for customers to access OTT content in lieu of receiving it in their traditional pay TV packages.

Should your business consider this strategy? On one hand, you could stand to save money in the long run as you cut down on the number of channels in your tiered cable packages. However, you could also risk alienating certain subscribers who would rather access their favorite channels over their standard cable packages rather than over the Web. Remember that not all customers are in favor of using OTT content, as many still prefer to tune in via their living room television instead of a smartphone or tablet.

With this in mind, we would be remiss in advising you to start shedding your channels in favor of a pure Roku-style delivery format.  Instead, you should proceed with caution and embrace OTT as a bundled solution. The goal is to strike an equilibrium with your customers, in order to appease both OTT fans and traditional television lovers. This way, you can still stand to make a profit from OTT—and make your business more flexible for your customers—without shaking the boat.

Do you have any questions about how your business should proceed with OTT content? We’d love to answer them. Click here to contact us today.