ADVERTISING ON PAY TV. OTT, A NEW OPTIMISTIC SCENARIO
Traditional business model of Pay TV has been based on subscription fees charged by the cable operators, satellite operators and IPTV operators to the end subscriber despite the advertising that broadcasters included in their channels or programs.
Thanks to the young but rapid growth of the over-the-top (OTT) video over the past few years the mentioned traditional business model is facing a new era.
Because of the internet flexibility, OTT service providers may try out a number of different economic models in which advertising play a key role. They can monetize their content library in a number of different ways, charging subscription fees for one show, transaction fees for another and ad rates for a third.
In this situation video format emerges as a major long-term driver of ad-funded digital businesses. Furthermore, through data, operators can enhance the value of their video inventory making it undoubtedly a premium product.
Following find some examples of key data that operators may have that supports this conclusion:
• Advanced Targeting Data at subscriber level such as:
• Context: viewing habits, channel/category, daypart
• Operating System
• Household cluster
• Engagement level
• Brand Safe site guarantee. The editorial context in which a video is shown continues to be important for advertisers
• Big screen real-estate available for contextual advertising but at the same time allowing audiences to become more mobile with content through tablets and smartphones
• Access to the flexible internet advertising ecosystem through adservers, Real Time bidding (RTB), Demand Side Platforms (DSP)
• Transparent and reliable metrics. Third party tracking such as impressions, video completion rates and others
It means that operators/publishers can potentially offer a much finer understanding of their audience than external parties. Leveraging the value of context and marrying it with audience based data can allow operators/publishers to assemble audiences in ways that are relevant to advertisers and reflect the uniqueness of their editorial offer.
Do not forget that video consumption environments are mainly not cookie-enable, so audience targeting will only be possible through first-party data.
All this aspects make OTT platforms ideal solutions for delivering a much flexible and high demanded product in which mixed business model based in pay per view, subscription fee and advertising may coexist together.
Such is the case of Hulu whose revenue "increased 43% 2013 YoY, accounting advertising a substantial part of this growth”, as its CEO Mike Hopkins explains in the news web Marketing News. Hulu offers Video under two programs, free + advertising and HuluPlus, subscription at low price (7,99$) with some advertising and wider video library.
Safeview has launched a new division specialized in digital advertising in order to help our clients to jump into de new scenarios. Please, feel free to contact us. email@example.com
Nepal's MSO Subisu moves to SAFEVIEW's IP and Multiscreen Solution
Subisu Cablenet, the largest MSO in Nepal, is deploying a new hybrid DVB-C/IPTV multiscreen solution with Android 4 STBs provided by Safeview. Subisu is currently migrating its HFC network to FTTH starting from the headend at Baluwatar, Kathmandu, and spanning all major locations in the Kathmandu valley.
Safeview’s solution was launched one year ago and provides either IPTV or OTT services – depending on operator strategy – using our own CAS, Microsoft’s Playready DRM and Android STBs – which can be provided by Safeview or third party suppliers. The solution enables new revenue models, including addressable advertising and coupon program management to build alliances with local retailers and stores. Personalized coupons can be charged via an OTT app in mobile phones.
The number of pay-TV subscribers in Nepal is estimated at around 1.5 million with Subisu and DTH provider, DishHome, the market leaders with more than 200,000 subscribers each. Subisu started operations as Doshan Traders – involved in the promotion of Chinese goods in Nepal – and was renamed Subisu in January, 1998, when it started representing foreign companies moving to exploit business opportunities in Nepal across the telecom, power, water supply and commodity sectors. Subisu CableNet launched its cable-TV services in Kathmandu in 2000, and started providing Internet services in August, 2004.
CABLE TV SERVICE PROVIDERS
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Contact: KARHUN NANDA 1204, ANSAL TOWER NEHRU PLACE NEW DELHI MOB:NO: 9811142991 KARHUN@SAFEVIEWINDIA.COM
Safeview Delivers Strong Customer Value Proposition in Cost-Sensitive Markets
Safeview Identified as a Hot Vendor in the Conditional Access Systems Market
MOUNTAIN VIEW, Calif. – January 30, 2013 – Pay TV systems rely on conditional access systems (CAS) to ensure that content and subscription revenues are protected against piracy. Major markets like North America and Western Europe have already digitized their cable systems and have mature offerings of satellite direct-to-home (DTH) and IPTV services as well. Hence, CAS vendors are focusing on growth markets like South and South-East Asia, as well as Latin America for maximizing future revenue prospects.
These growth regions are quite different in nature from the more established Pay TV markets. For example, the average revenue per user (ARPU) for digital cable in India is approximately $5 USD, while the ARPU for Pay TV in the United States is more than $50 USD. Similarly, the average price for a set top box in the United States is more than $100 USD, while the average cost in China is under $20 USD. On the bright side, subscriber counts in these densely populated regions can be in the tens of thousands even for lower tier operators, so the volumes can – to some extent – compensate for the lower price points supported by these markets.
These growth markets are also regions where piracy rates are traditionally higher, and law enforcement is typically less effective, placing a greater burden for security on the CAS system alongside the pressures for low-cost, high-reliability systems. To succeed in these markets, most vendors are pursuing a volumes strategy, offering the minimum necessary functionality with adequate security to simultaneously meet the functional and pricing needs of the Pay TV service providers. For leading vendors in the market, this is relatively easy to execute from a liquidity perspective. However, for smaller vendors, this is a much more challenging task.
As part of every market that the Digital Media group at Frost & Sullivan studies, one or two vendors are identified for their potential to outgrow the market based on the strength of their organizational strategy, product and pricing strategy, sales channel strategy and partnership strategy. For its strategic excellence in navigating the challenges of growth markets in the Pay TV CAS and DRM market, Frost & Sullivan identifies Safeview as a Hot Vendor in an analysis of this market for 2012-2013. From its inception as a spin-off of leading Spanish Telco Telefonica, Safeview established a global footprint through local joint ventures with carefully chosen partners who are entrenched in the local MSO communities. These partners provide the trusted relationships with MSOs that ease the way for successful sales for Safeview, as well as critical insights into local customer requirements. Recognizing the lack of technical expertise with these smaller MSOs, Safeview is also taking on a systems integrator role. This is done through
customer service and technical service centers established in the same geographies as their global customers to maintain profitability in a highly cost-competitive market.
In the cable segment, Safeview is aggressively targeting tier-II and tier-III cable operators in India and Latin America. This is a strategic sweet spot – these operators are not large enough in size and do not have high enough ARPUs that justify the price points of the highest-end solutions in the market. However, they are not so small that they need to settle for minimal solutions that typically provide CAS systems at no cost when bundled with a set top box purchase.
“Safeview is prudent in its focus on India in this narrow window of opportunity during the next two years of aggressive cable digitization,” said Frost & Sullivan Industry Manager Avni Rambhia. “They are targeting the market in a customer-centric way with products and pricing targeted to meet local market demand and excellent customer support, which provides a compelling differentiator against other smaller vendors competing for the same business.”
If you are interested in more information on the Pay TV Conditional Access Systems and Digital Rights Management market, please send an e-mail with your contact details to Mireya Espinoza, Corporate Communications, at firstname.lastname@example.org.