Decipher MD: VOD services pose little threat to UK TV market
Left to right: Paul Scanlan, Emma Scott and Nigel Walley.
It may be that video on demand (VOD) services from Netflix and Amazon – and now CBS and HBO – are gaining some serious clout across the pond, but beneath the press hype, do such players really have the capacity to disrupt the UK television market?
Decipher’s MD, Nigel Walley, says that the idea is “utter nonsense”, and on the back of American cable companies HBO and CBS announcing the launch of over-the-top streaming services, likened them to similar UK players that “really haven’t done anything.”
Comparing CBS’ latest VOD offering to the UK’s ITV Player, Walley said neither put any of their premium sport on the platforms.
“The CBS thing is a damp squib,” said Walley, during a debate at MediaTel’s Media Playground event on Monday (3 November). “It’s a pay OTT service to give you a load of content you can get for free over a network.”
HBO, however, should be a more interesting proposition, he said, “but if you compare it to [Sky’s] Now TV over here, it’s a premium package with low-premium TV put into it.”
HBO’s new foray into the VOD streaming market hopes to target the 10 million broadband-only homes in the US, meaning that consumers without a cable or satellite subscription will have access to HBO content from early next year, including Game of Thrones, The Sopranos and The Wire.
However, Walley said that while the US media and tech press were “going nuts,” we shouldn’t jump the gun.
“It’s an OTT service that comes without PVR capability,” he said. “Also, if you want everything you like on TV you’ll end up subscribing to four or five of these things – and then what you’ll be looking for is somebody who can actually aggregate it all together and put it into one big package, maybe with PVR as well, and then you go oh – that’s pay TV.”
Walley said that the industry needs to take a step back from the linear broadcast versus VOD discussion, and remember that personal video recording (PVR) is actually the most important function after broadcast – not VOD.
According to consumer research by Decipher, when looking at likes and dislikes in TV, live TV came out on top in terms of the functionality people want the most, followed by the ability to pause TV and record shows – both of which are PVR functions.
Walley explained that the reason consumers still use a PVR when there is a range of video content available on-demand is that the PVR is an aggregate of specifically requested and bookmarked content – “the PVR is mine” – while VOD content is a huge archive that needs wading through to find the programmes that consumers want to watch.
“There’s a role in the market for [VOD] but it’s a niche, not an industry-killing proposition,” Walley said.
Countering Walley’s views, MobiTV’s co-founder and president, Paul Scanlan, said that on-demand content providers have proved that their model is “wildly successful” – even in the US, which has one of the most dominant pay TV industries in the world with approximately 89% penetration.
“The US is Netflix’s most successful country,” he said. “That tells you that even in a market where everyone would say ‘but we don’t need it because we have such strength and there are so many robust offerings’, Netflix was able to not only launch but create an unbelievable amount of content.”
However, Emma Scott, MD of Freesat, echoed Walley’s argument and described the likes of Netflix, Amazon and Tesco’s Blinkbox as “displaced movie services” that will “not eat into traditional TV viewing.”
While Tesco is set to sell or close its loss-making service Blinkbox, Scott said Netflix and Amazon will remain “the most important” players in the UK.
“But unless they embrace linear as part of the mix they’re not going to be a one-stop shop for consumers,” she said.
“In the end, Amazon are a grocer; they’re an online retailer… They want to sell equipment and they’re less interested in content.”
To find out more about MediaTel events, click here