Martin Sanchez: ‘In the short term, linear TV channels will not disappear’

The second Nextv Series South America’s panel -virtual conference developed by Dataxis on November 4th and 5th-, was called  ‘OTT Integration in Pay TV’. Some of the key topics of the debate were related to challenges and barriers for STBs app integration; add on, carrier billing and partnership models ; and the transition from B2C to B2D2C models.

For the debate, Dataxis brought together a group of expert industry executives on the matter, which included Mireia Cuenca, Entertainment Partnerships Manager at Telefonica; Hugo Ramos, Chief Regional Technologist at Commscope; and Martin Sanchez, TV Ecosystem Manager at Telecom Argentina.

In relation to Flow’s performance and how the Coronavirus pandemic has affected them, Sanchez reported that ‘we have had a sustained growth rate in recent years. The pandemic accelerated the OTT deployment of the entire platform, more than anything because, as of March, we began to grow in terms of consumption and device activation’. Later, the executive added that ‘by the end of the year, we expect to exceed 5 million connected devices, including the three countries where we are currently operating, which are Argentina, Uruguay and Paraguay’. Sanchez also reported that Telecom Argentina had ‘a stoppage on STBs installations in households due to the pandemic, but it has normalized, and we hope to end the year with around 1.5 million Flow Boxes distributed. In addition, during the pandemic period, we had between 60% and 80% more consumption on web devices and smart TVs compared to the previous months’. Cuenca also gave her vision of Movistar Play’s performance in South America, and stated that ‘we already have more than 500 thousand homes with IPTV STBs. In addition, between March and June / July, Movistar Play made a great intensity and engagement between the acquired plant and the whole new one that we have been adding, with unbeatable levels so far’.

Ramos was asked about the main technical barriers for the integration of different apps, and stated that ‘it is a matter of efficiency. There are three main points. First, the knowledge challenges. Today, we are in an ecosystem, and we must have knowledge to take advantage of the device. Second, we must analyze how to make the devices support the addition of new apps. Finally, and perhaps the most important point, is to take into account that this ecosystem is much broader. We must guarantee the connectivity of the decoder. Operators have the most important role, which is to be aggregators of all this content’.

Regarding the integration of Disney+, Cuenca reported that ‘it will be very different from that of pure OTTs, for two main reasons: because of the path that other streaming services such as Netflix and Amazon have already developed  for more than five years, and because of the weight that Disney has in the entertainment content world’. In addition, Telefonica’s executive pointed that Disney ‘has recently announced a reorganizational change, focusing on entertainment, with Disney+ at the top, breaking the staff that will produce the content from that which will monetize it, and this will guide a lot how will the integrations be, both commercially and technically, based on the fact that exclusivity agreements are being implemented with key operators in the different markets’. In the case of the integration of Disney+ in Flow, Sanchez explained that ‘we have just announced an integration offer, and it is an agreement that will be officially launched on November 17th. We will not remove Disney channels from our offer. Everything will keep the same, and we continue to add content’. In relation to the current situation of linear channels, the executive said that ‘the consumption of non-linear content is accelerating. Currently, we have high ratings in prime time in the consumption of OTT content within our STBs. However, rating on linear news, sports and events channels will undeniably last for a long time and we will not see a disappearance in the short term’.

Regarding the competition of pay TV operators with streaming devices such as Roku, Apple TV or Google in aggregation of OTTs, Ramos reported that ‘the main point is that the operator continues to be the content aggregator. It is a service aggregator; it is a billing aggregator; and it is a content aggregator. In relation to service, it is a very important issue for the operator. That is why it makes a great difference in terms of connectivity, service support, quality assurance and experience. Ensuring the correct work of the entire ecosystem is important’. The executive also assured that ‘the expansion of content is the new frontier that the operator must begin to follow in order to continue being an aggregator, and it will make a difference both in the service and in the expansion of the content that it delivers to customers’. This way, Cuenca assured that ‘the role of TV operators is critical. It is estimated that, by 2023, more than half of the subscriptions to OTTs will be made directly, or through a third-party platform. So, we must be there, adding both the top players and the long tails in our ecosystem, arriving on the main screen, and adding our commercial capabilities. Based on these two concepts, we should get a good position in the market’.

‘We are working in order to understand how we should align ourselves with the growing demand, which are services that are not only based on video streaming’, said Sanchez, and then added that ‘additional services are topics that must be developed and we have to have them supported in the future’.

Finally, when giving his point of view on the main technological challenges for the integration of all this content by operators, Ramos assured that ‘there is a very great opportunity’. The executive reported that ‘in Flow, Fortnite’s growth was 240% during the pandemic. There is a lot of importance in games. In addition, the launch of Avengers, in 2018, generated USD 250 million due to its premiere. GTA 5 was released in September 2013, and it generated USD 1 billion in three days. Expanding the content is very important. The operator’s opportunity is great, together with the advancement of media players. The opportunity is available to add these new services, which will generate new income and even the possibility of creating a digital console, and help to have a much improved, simplified, integrated and proactive customer care. It is very important that the media device evolve, because ensuring that the operator has this new content for consumers added in a simple way and having a more proactive support is something crucial for the evolution of entertainment consumption and interaction for the coming years in our region’, he concluded.

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