Tag: Distribution OTT Video

IHS: Netflix Needs More Than ‘Sacred Games’ to Drive Consumer Adoption in India

There’s a reason Netflix is emphasizing localized content and talent when expanding service abroad: Consumer adoption.

With over-the-top video by nature offering loss-leader pricing, services such as Netflix and Amazon Prime Video haven’t yet engaged in price warfare against regional competitors.

But simply regurgitating Hollywood movies and TV shows is a strategy of the past in markets such as India and China – two regions of the world Netflix and Amazon want to establish significant presence in.

In India, OTT video services will add 25 million subscriptions over the next five years, three million more new subs than pay-TV. It will exceed 35 million OTT video subs by the end of 2022, according to new data from IHS Markit.

When it comes to choosing connected video services, IHS found that more than 76% of connected consumers in India feel local content is important – with 74% citing the importance of quality subtitling and dubbing. Pricing also remained important across all markets surveyed.

As Netflix & Co. increase their focus on the Indian video market, including investment in local content, they continue to face competition from India’s well-established local OTT players.

The country’s successful domestic film and network TV markets pose challenges for newcomers lacking local content libraries. Despite launching “Sacred Games” this year, featuring Bollywood star Saif Ali Khan, IHS says Netflix still has a long way to go to grow its Indian subscriber base.

Star India launched Hotstar, an ad-supported video-on-demand (AVOD) service in 2015, followed by SVOD service, Hotstar Premium, in 2016. The service is forecast to grow its Indian subscriber base 60% this year, accounting for 25% of all online video subscriptions in the market.

Its success has largely been supported by content investments, including premium sports, local-language content and international content from HBO, Disney and Fox.

Although pricing is the most important factor in a video service across all country markets surveyed by IHS, Indian consumers were most likely to cite price as an important factor in their video service decisions.

Average revenue per user (ARPU) among pay-TV subs in India reached $4 monthly in the satellite heavy market, while local OTT subscription services cost less than $1 per month. In comparison, the basic Netflix subscription in India costs $7.

To succeed and grow in India’s content-hungry market, IHS says global OTT video players need to provide the correct mix of content at the right price.

Online TV Growth Slows Despite Record Q3 Pay-TV Subscriber Exodus

The most-recent fiscal quarter (ended Sept. 30) was not a good one for pay-TV operators, which continue to see increasing numbers of subscribers exit for video alternatives online.

Or not.

It was also a wake-up call to multi-video program distributors who think online TV is the answer to fickle pay-TV consumers.

 The cable, satellite and telecom operators lost a combined 1.2 million video subs, ending the quarter at 91 million, including 88.2 million residential customers, according to new data from Kagan, a media research group within S&P Global Market Intelligence.

Meanwhile, while many pay-TV subs are becoming cord-cutters, they’re not all migrating to online TV platforms such as Sling TV, DirecTV Now, Hulu with Live TV, YouTube TV and PlayStation Vue.

Kagan found that online TV services gained an estimated 2.1 million subs in the past nine months – not enough to offset a decline of 2.8 million pay-TV subs.

Indeed,Dish Network-owned Sling TV and DirecTV Now added just 75,000 subs in 3Q, compared to about 530,000 additions in the previous-year period. The additions were the lowest since the market’s launch in 2015.

Satellite had its worst quarter on record with a loss of 726,000 subs, according to Leichtman Research Group. Cable lost nearly 1.1 million subs – the worst performance since 2014.Telco subs fell by 94,000, led by Verizon, which jettisoned 63,000 subs.

Telephone providers lost about 80,000 video subs compared to a loss of 180,000 subs last year. Pay-TV services (excluding online TV) lost 1.05 million subs compared to a loss of about 940,000 subs in 2017.

“This marked the most net losses ever in a quarter for the pay-TV industry,” Bruce Leichtman, president and principal analyst for Leichtman Research Group, said in a statement. “Satellite TV had more combined net losses in than in any previous quarter.  These net losses were largely driven by corporate strategies focused on acquiring and retaining more profitable subscribers.”

Leichtman attributed some of the online TV sub growth slowdown to corporate parents’ emphasis on improving the profitability of the Internet-delivered flanker brands.

“[This] reduced net quarterly adds in the segment, resulting in [online TV] not helping to mitigate overall pay-TV losses to the degree they had in recent quarters,” he said.

Pay-TV Providers Subscribers at end of 3Q 2018 Net Adds in 3Q 2018
Cable Companies
Comcast 22,015,000 (106,000)
Charter 16,628,000 (54,000)
Cox* 4,035,000 (30,000)
Altice 3,322,800 (28,100)
Mediacom 793,000 (15,000)
Cable ONE 328,921 (11,191)
Total Top Cable 47,122,721 (244,291)
Satellite Services (DBS)
DIRECTV 19,625,000 (359,000)
DISH TV 10,286,000 (367,000)
Total DBS 29,911,000 (726,000)
Phone Companies
Verizon FiOS 4,497,000 (63,000)
AT&T U-verse 3,693,000 13,000
Frontier 873,000 (29,000)
Total Top Phone 9,063,000 (79,000)
Internet-Delivered (vMVPD)
Sling TV^ 2,370,000 26,000
DIRECTV NOW 1,858,000 49,000
Total Top vMVPD^ 4,228,000 75,000
Total Top Providers 90,324,721 (974,291)

 

 

Altice USA Softens Q3 Pay-TV Subscriber Losses

Cable operator Altice USA reported third-quarter (ended Sept. 30) pay-TV subscriber losses of 28,000, which was more than 15% improvement from 33,000 subs lost in the previous-year period.

New York-based Altice USA, which was created as a separate entity following the 2016 acquisition of Suddenlink and Cablevision by Netherlands-based multinational telecom Altice, attributed the improvement to few sub losses (7,000) at Suddenlink than in the prior-year period (14,000).

Suddenlink ended period with 1.01 million pay-TV subs compared to nearly 1.05 million during the previous-year period. Cablevision ended with 2.3 million from 2.38 million.

Overall net income topped $33.7 million on revenue of $1.05 billion, compared to a loss of $192 million and $1.07 billion last year.

 

 

 

No Surprise: Millennials Love Netflix

At a time when media companies rapidly deploy over-the-top video platforms, and pay-TV operators scramble to embrace Netflix to appease cord-cutting Millennials (ages 18-34), new YouGov data finds the demo enthusiastically embraces the SVOD behemoth.

In a survey from September 2017 through August of this year, 75.6% of Millennials recalled both hearing something good about Netflix in the past two weeks and discussing the brand with friends or family members within the same time period.

Runner-up was Facebook, with 75.1% of respondents having both heard something positive about the social network and discussed the brand with friends or family members. Facebook-owned Instagram (69.0%) came in fifth place, with a slightly higher percentage than YouTube (68.9%) and Snapchat (68.8%), according to YouGov.

The Apple iPhone (71.1%) came in fourth place, behind retail behemoth Walmart (73.6%).

Three brands — Victoria’s Secret, McDonald’s, and Chick-fil-A — tied for eighth place, with 66.8% of young adults reporting they came across positive information pertaining to each one around the same time they discussed the particular brand.

Among consumer brands generating the most improvement among Millennials, Dunkin’ Donuts had the biggest rise, climbing from 53.7% in 2017 to 59.7% in 2018. The chain, which just announced it would drop “Donuts” from its brand name in 2019, offering customers the ability to place their order via smartphone.

 

Cisco’s Former Video Software Biz Renamed ‘Synamedia’

A new video technology company named Synamedia has been formed from the recent sale of Cisco Systems’ Service Provider Video Software Solutions unit to investment firm Permira Funds.

“Syna” means “together” in Greek, reflecting Synamedia’s goal to empower broadcast, pay-TV and over-the-top video services to optimize their current infrastructure and capitalize on OTT distribution to expand consumer choice and convenience, secure revenue streams, and develop new offerings.

“From day one we will be the vendor with the ability to deliver products on a global scale while also offering the flexibility required for market localization,” Yves Padrines, incoming CEO for Synamedia, said in a statement.

Padrines is currently VP of Global Service Provider for Europe, Middle East and Africa at Cisco.

Synamedia will offer software for hybrid broadcast/IP services on multiple devices, including set-top boxes devices. Features will include an anti-piracy service for rapid detection of, and response to, illegal streaming. Other new offerings include “VideoGuard Everywhere” and “VideoGuard Server” support for Android devices.

“We will intensify our focus on innovation, building even closer links with our customers and ensuring that we continue to provide the world’s most complete, secure and advanced end-to-end video delivery solution,” Padrines said.

The company is also offering software it claims can reduce streaming latency on a STB down to six seconds – comparable to a live broadcast. This would be lower than traditional streaming technologies, where latency can be as high as 40 to 90 seconds for streaming video to receiving devices.

“Synamedia enters the market at a time when the TV landscape is being redrawn. Building on a 30-year heritage in the pay-TV industry, a market leadership position, and an unrivalled reputation for innovation, we will hit the ground running as a private, independent entity committed to help customers boost engagement and revenues by capitalizing on the myriad opportunities that IP distribution and cloud- based services bring,” said Dr. Abe Peled, incoming chairman of Synamedia.

Will Smith, Director Marc Forster Acquire German Home Entertainment Distributor

Will Smith (Bad Boys, The Pursuit of Happyness, Ali, Men In Black, I am Legend) has joined with director Marc Forster (Monster’s Ball, Quantum of Solace, World War Z, and Walt Disney Pictures’ upcoming Christopher Robin) to acquire Telepool GmbH, a German licensing and distributor.

Telepool was acquired from the company’s former public-broadcasting shareholders Bayerischer Rundfunk, Mitteldeutscher Rundfunk, SWR Media Services GmbH (a subsidiary of Südwestrundfunk) and Telvetia S.A. (a subsidiary of SRF). Financial details of the deal were not disclosed.

As part of the sale, Telepool will become a development, financing and distribution partner for film projects of Will Smith and Marc Forster. The acquisition was made by The Smith Family Circle, Will and Jada Smith’s Family Office, and Elysian Fields, a group of investors associated with Marc Forster.

Telepool’s core business is the acquisition, sale and promotion of theatrical, DVD, TV, VOD and gaming content, as well as merchandising and licensing of publishing for German-speaking territories (GSA). Additionally, the group acts as a world sales company for theatrical and TV content. The Telepool group has offices in Munich, Zürich, Leipzig and Los Angeles.

“Marc and I took a close look at Telepool and discovered a company that has an incredible reputation and a lot of potential,” Smith said in a statement. “We look forward to working together and with the Telepool team to create unique opportunities and content to strategically growing the business.”

As a part of the deal, Smithand his long-time business partner James Lassiter will have the option to develop and distribute film and television projects through Telepool. Lassiter’s Overbrook Entertainment remains its own independent production entity producing and developing film and television content.

Similarly, Forster and Renee Wolfe’s independent production entity 2dux² will also have the option to develop and distribute film and television projects through Telepool while also remaining fully independent.

“As a German-born Swiss national, I was familiar with Telepool long before completing this acquisition with Will and his family,” said Forster. “We believe that Telepool is well positioned for continued success and growth in our rapidly changing media landscape.”

“The new shareholders are very much committed to continuing our business model, added André Druskeit, who assumed the CEO position on June 1. He said all management positions at subsidiary companies would remain unchanged for the time being.

“The setup is great, and we are looking forward to many exciting projects with Will, Marc and all our business partners,” Druskeit said.