The failure of a number of European digital pay-TV platforms has been caused by their strategy of offering exclusive content – a move which is ‘bringing them to their knees financially’. This the finding of a report published by economic analysts BIPE.
The group says that Europe’s pay-TV industry, currently reeling under losses and bankruptcies (ITV Digital in the UK and Spain’s Quiero both collapsed this year), could recover and move into a viable digital future, if companies’ strategies are changed.
“Up to now, pay TV platforms have sought to make their offering exclusive, either by the soccer matches they screen, or their bouquet of theme channels or their set-top box, but this strategy is bringing them to their knees financially,” says the report. Instead the industry should become less exclusive and ‘vertical’, with operators either distributing a service or running theme channels and equipment should be standard, say BIPE researchers.
“Either they (pay TV firms) should concentrate on being a distributor and abandon owning channels, or they should run channels and abandon distribution,” Reuters quotes said researcher Pascal Lefort, who unveiled the report.
“The way to avoid mergers and to stop the financial haemorrhage is to move towards this de-verticalisation,” co-researcher Vincent Létang said. Such an approach would have prevented the demise of ITV Digital and Quiero, he added.
“The failure of digital terrestrial TV in Europe is in reality the failure of business plans and an outdated vertical business model with high fixed costs,” is one of the report’s conclusions.
