Hugo Cosentino, general manager of San Luis CTV, said that operators must reinvent themselves and invest more in technology to offer value-added services in order to prevent subscriber losses, given the current scenario in Argentina.
The executive participated in the panel ” How OTT Pay TV Will Change Pay TV Business” during the first day of NexTV CEO Latin America, the leading conference that takes place in Miami and concludes its fifth edition today.
San Luis CTV was a pioneer in offering triple play services in that Argentine province. Now, Cosentino shared with NexTV News Latam his vision on the current market and the growing offer of pay TV OTT.
According to the executive, a change has begun in the consumption habits of TV subscribers, “based on individualism, virtual social reality, multitasking and the idea of wanting everything right now.”
“This reformulates the business because there is indeed a great demand for value-added services and consumers want content availability on all screens. Consume when they want, where they want and the way they want.”
-What is the main meaning of the OTT pay TV projects and deployments? To defend against possible competition via OTT? To attract the possible cord-cutters?
The future of the industry is to understand that technology adds value to the user. Cable operators are understanding that they must invest and reinvent themselves. In Argentina, this year the merger between Cablevisión and Telecom was approved; the company has Flow, a very powerful OTT platform where different VOD content offers coexist. And recently it was announced the launch of Movistar TV, Telefónica’s OTT, the other major telecommunications operator. They are preparing to compete.
The current economic and exchange crisis in Argentina is encouraging the cord-cutting effect, so the operators mainly want to retain possible cord-cutters offering value-added services and in many cases with very little monetization, the important thing is to maintain the ARPU. Technology must be offered to consumers to prevent them from leaving; because if that happens we would be failing as a company.
What opportunities does this service model bring to a pay TV operator?
The OTT TV service allows expanding the market and capturing cord-nevers. They only pay for broadband connectivity. They are native OTT consumers.
On the other hand, companies like Netflix, Facebook, Google, YouTube, etc. they use our networks to do business; but thanks to the existence of these companies, we have had a great growth in terms of broadband connectivity clients. Thanks to the fact that Netflix was on the other side and it needed a certain service rate, we were able to grow and develop to increase broadband.
In the future: Will the service be provided primarily through OTT?
No. While Netflix, Amazon, Hulu, have shown that OTT content is not the future of entertainment, but the present, and that in 2021, 80% of the data that will be consumed in the IP point will be content videos and 20% IoT (internet of things), the reality is that pay TV has millions of users and in Argentina has revenues of USD 3,000 million annually versus USD 200 million of OTT services. To the extent that broadband connectivity does not expand, streaming services will not be a threat to pay TV. Today, what is growing is the speed of those already connected. In other words, it is difficult for the OTT service to be provided in a primary way in the near future.
-Are users watching live, linear content, or are they watching it as a large VOD library?
The change in consumer habits and the possibilities of technology make that users increasingly watch linear, live content in a non-linear way, that is, as a large VOD library.
–Some operators offer the linear OTT platform on the main TV screen using hybrid STBs, including retro EPG and nPVR. Does this proposal have value? Will small and medium operators have to follow this trend?
This proposal incorporates technology and added value for users in the first screen. The hybrid STB allows converting a TV into a Smart TV and through a middleware, to access to a link of the OTT platform website, in addition to act as an access point offering a WIFI connectivity service. It has the limitation that is only for the first screen and on a controlled network. The platform can be enhanced, incorporating more signals, increasing the number of profiles for different screens and even catch-up TV. If a strategic alliance is made with other platforms such as Netflix, from the commercial point of view, it allows to offer an interesting solution.
But always keep in mind that network operators must grow being smart investors, creating the best broadband experience for their customers, the quality of the network is crucial.