Another of the panels developed during the first Nextv Series Mexico’s virtual edition o was titled ‘OTT Integration in pay TV’, in which topics debated were focused on the challenges and barriers for STB apps integration; add on, carrier billing and partnership models; the role of FTA broadcasters as OTT integrators, and other related issues.
For the debate, Dataxis gathered a panel of expert executives from the industry, such as Vanessa Rosas Molina, COO at Blim TV; Richard Johnson, GM & EVP Americas at Evergent; and Sebastian Snaider, Vice President of Distribution at Starz.
‘Mainly in Latin America, distribution strategies through OTT and pay TV services are basic to distribute, to monetize, to generate trust in users, and they also work as aggregators, because users have many OTT services that they hire. This helps us to have everything in one place and, obviously, it also helps them so that they do not have to choose between pay TV and OTTs, but they can have everything in one place, and pay TV knows what the user would not like to have. It is a partnership that benefits both of us’, said Rosas Molina.
In relation to the main challenges for the integration of a VOD OTT app and a pay TV operator, Johnson explained that ‘a successful OTT service is based on three basic issues: continuous growth in revenue through subscribers acquisition and retention; introduction and promotion of new products and services; and the ability to have a variety of billing and payment options. But there are many challenges, including managing multiple currencies; different tax schemes; different payment options (such as prepaid and postpaid); different subscription periods; and different payment methods’. The executive also added that, to be successful, an OTT ‘must be able to experiment with different plans and promotions quickly and profitably, to maximize revenue growth. All this must be done at a cost aligned with the region’s CPMs, which in Latin America are quite low in relation to other countries’.
‘We are working on integrating Blim TV into pay TV operators, starting mainly in Central America, and, in the rest of the countries where we are currently available, we are only using iOS and Android’, said Rosas Molina. With regard to how billing agreements work in cases of service integration with a pay TV operator, Snaider reported that ‘generally, there is always a revenue share model, but there is not much possibility to innovate, because we are also limited for the acquisition of studios rights. The two basic models are bundles and carrier billing’.
With regard to connected devices in which users consume OTT content, Rosas Molina assured that ‘it is closely related to the target we are targeting, but the main way of consumption is through mobile devices. Although it is very attached to the web, mobile is the main one; in addition to smart TVs, and sticks, like the Roku one. Amazon Fire has been just launched in Mexico, but Roku is more positioned. Mobile, webs, smart TVs, Roku, Amazon Fire, Xbox and PlayStation are the most used’.
‘At Evergent, we have found that customer retention tends to be higher with customers who are used to using more than one device’, Johnson said. ‘In a global way, the trend is that devices connected to TVs are coming to have higher consumption of OTT content. In North America (UCAN), looking at the streaming device market during Q1 2020, smart TVs had 31% of all connections. Fire, Roku and the other connected TVs had 53%; and mobile devices had only 16%. Therefore, I think there is a trend towards connected TVs’, the executive reported.
Likewise, according to Snaider, ‘cell phones have gained a lot of ground in terms of device share in recent times, and this is shown in direct-to-consumer platforms, where cell phones are always the primary ones. However, we also have to consider that the device with the highest consumption also depends on the partner that is distributing it. Also, we must not forget that cable still exists and the habit of sitting down to watch TV as well. In platforms for digital native audiences, cell phones will continue to prevail and we will continue to see that they will continue to increase’.