Earlier this year, the Pay-TV Innovation Forum launched its 2019 programme, inviting senior executives from leading pay-TV providers, broadcasters, rights holders and technology suppliers to a special European seminar, exploring the challenges and opportunities facing Europe‘s pay-TV industry, at the end of a disruptive decade. The discussions explored a wide range of themes and issues, from the future of the pay-TV market through to exploring the opportunities in data and analytics.

1. 2019 Edition
Europe: Setting the Scene

2. 1
This Slideshare presentation is based on the
Pay-TV Innovation Forum’s 2019 European
Findings
Key Takeaways from the Pay-TV Innovation
Forum’s European Seminar
Download your copy here

3. 2
In 2019, the programme investigated five key themes:
Key themes
1. Responding to OTT growth 2. Rethinking aggregation
3. Transforming the pay-TV
enterprise
4. Deploying advanced data and analytics
and AI/ML
5. Combatting content piracy

4. 3
Aggregation has been core to the pay-TV operator business
model – but the market is changing rapidly
Growing importance of
triple/quad play
Reinventing the role of
the aggregator
Unbundling and skinny
bundling
Key themes

5. 4
New connected devices are disrupting the market – but
doubts remain about future aggregation models
“A critical examination of the evidence suggests that D2C is unlikely to be a universally better
model, genuine profitability is hard to come by and the big bundle is proving more resilient
than some expected.”
Mike Darcey, ex-Sky
Key themes

6. 5
Across Europe, pay-TV operators are re-thinking their content
aggregation strategies, replacing linear channels with on-
demand services
We're increasingly able to make
choices across our portfolio to
optimize and save cost. So you
should expect us to reduce our
investment in things like second-tier
sports rights, where they're not
delivering value, and to reduce the
volume of more niche movies and
linear entertainment channels
because of the quality of the on-
demand service that we've built.”
Jeremy Darroch, Group CEO, Sky plc
Source: Comcast Q3 results call (2018)
Key themes

7. 6
OTT should be core to any and all
pay-TV providers so if you have
not yet developed a compelling
OTT service, then do it now […]
And when I say OTT, I do not
mean on-demand content only –
we should not forget that TV
companies have live TV content,
and live TV attracts big
audiences.”
Holly Knill, Director – Now, Foxtel,
Australia
“The term ‘OTT’ is increasingly redundant. The emerging, future version of pay-TV
services – which is cloud-based and reliant on IP delivery – looks like an OTT
service.”
Michael Fleshman, CTO, HOOQ
In the future, many executives expect future pay-TV offerings
to be structured around subscription OTT services
Key themes

8. 7
European pay-TV operators are already well advanced with
integrating OTT services to strengthen their bundles
Limited aggregation of
pay channels and
third-party SVOD
Broader aggregation
of pay channels and
leading SVODs Growing focus on the
platform features to
drive user experience
Source: BT Group Consumer Business Briefing (2018)
Key themes

9. 8
Pay-TV platforms will need to become more advanced and
sophisticated
We will play the
role of a content
aggregator with smart
investments. We are
also improving the
platform to have the
most advanced
platform in the market.”
Dirk Wössner, Managing
Director, Telekom
Deutschland GmbH
We see ourselves
as aggregators of SVOD
services as well as TV
channels. Twenty years
ago we were an
aggregator of channels
and increasingly we are
becoming an
aggregator of SVOD.”
Manuel Cubero, former
Chief Commercial Officer,
Vodafone DE
We need to have
[[OTT services] in our
package. Our value is as
an aggregator, so we
need to add them as
another layer to the
experience, using
common search and
recommendation, within
our user interface.”
Pedro Bandeira, former
Head of Product
Development, NOS
Key themes

10. 9
Partly as a result, digital business transformation has emerged
as a critical priority for the pay-TV industry
“We started using the phrase ‘digital transformation’, migrated
processes and tools to be more digital, and created a
dedicated business unit, and thought we’d automatically see
that transformation happen.
A digital transformation isn’t about digitising a channel or
simply doing more things digitally. It’s a much broader scope
than that. We’re really looking to improve and simplify
customer ‘moments of truth’—and all the supporting processes
that build a true omnichannel, world-class experience.”
Rob Roy, Chief Digital Officer, Sprint
Key themes

11. 10
However, many pay-TV operators face significant operational
challenges in transforming their businesses
Digital transformation challenges:
• Years of legacy – infrastructure, people, systems, culture
• Complexity – product sets, customer segments
• Limited agility – hard to mobilise at scale
• Margin pressures, declining prices, business disruption
• Industry consolidation, focus on synergies
• Appetite for risk, investor pressure
Key themes

12. 11
Data and advanced analytics are key enablers, supporting
new services and helping to improve core business functions
Customer acquisition,
retention and churn
reduction
Targeted / personalised
ads
New product
development
Content management
Personalised user
experience
Content creation
Customer service and
care
Network management
and Quality of Service
Significant
opportunity to
leverage data
capabilities
within existing
operations and
innovation
Key themes

13. 12
However, challenges remain – technical platforms are often
poor quality and data is often siloed and rarely shared
“We should be moving away from
the old way of doing business.
Away from the old negotiating
game of not sharing data with
each other or fighting with
affiliates...”
- International Studio Broadcaster,
Western Europe
“Data changes everything –
processes, people...The majority of
operators do not have [data]
expertise today. They understand
it is the future but I would say the
vast majority are not yet ready.
- Tier 1 pay-TV platform, Western
Europe
Key themes

14. 13
As OTT grows, piracy challenges are intensifying – for sports
and other content – creating new challenges for the industry
Mayweather-McGregor Fight: Pirated
Live Streams Reached 2.9 Million
Viewers (2017)
Premier League: Third of fans say they
watch illegal streams of matches (2017)
Sources: BBC (2017); Variety (2017); Advanced Television (2019); Bloomberg (2019), Advanced Television (2019)
Qatar Sportscaster Fires Hundreds After
Losing Markets to Piracy (2019)
Film and TV piracy fell in France in
2017 but still cost country €1.2bn (2018)
Indonesia: Investment in local content
threatened by piracy (2019)
Launch of HBO’s Game Of Thrones
season 8 triggers global piracy frenzy
(2019)
Sports content Other content
Key themes

15. 14
Piracy has become more diverse, with new platforms and
changing regulatory frameworks
Streaming
devices/software
Live streaming
platforms
Regulators/broadcasters
adapting to new
consumer behaviours
Key themes

16. 15The Pay-TV Innovation Forum
About the Pay-TV Innovation Forum
Launched in 2016, the Pay-TV Innovation Forum is a global research
programme for senior executives developed by NAGRA and MTM
and designed to explore the biggest challenges facing pay-TV
operators and content owners at a time of unprecedented change.
The 2019 edition, which runs from March to September 2019,
features in-depth interviews, a global survey with leading industry
executives, regional seminars and a special report on the growth of
premium sports OTT services around the world.
The flagship final report, which summarises key findings from the
programme, will be published in September 2019.

17. 16
We’d love to continue the discussion …
Please email PayTVIF@mtmlondon.com or visit dtv.nagra.com/paytvif