NAGRA, a Kudelski Group company and the world’s leading independent provider of content protection and multiscreen television solutions, in partnership with MTM, a leading international research and strategy consultancy, today published the key takeaways from the European edition of the 2019 Pay-TV Innovation Forum , a global research programme for senior executives designed to explore the biggest challenges and opportunities facing the pay-TV and content industries at a time of unprecedented change.

In a specially convened seminar held in London, senior pay-TV and content provider executives expressed their optimism about the future of the pay-TV industry in Europe and identified five key priorities for the industry in the coming years:

1. Industry executives are optimistic about the pay-TV industry’s ability to reinvent aggregation models 
Executives believe their existing aggregation models must evolve in response to the rising popularity of OTT services, and an anticipated decline in the number of linear channels. 94 percent of participants believe that, by 2024, major platforms in European markets will carry 20 percent fewer linear pay-TV channels than today: the changing dynamics of the wider industry – including the shift from linear to on-demand viewing – means that some smaller channels will become unsustainable.

2. The anticipated proliferation of subscription OTT services presents opportunities for pay-TV providers to become ‘super-aggregators’ of content
79 percent of executives polled believe that major OTT subscription services, such as Netflix and Amazon Prime Video, can be valuable as part of the pay-TV offer. On-boarding OTT services can deliver both convenience and utility, as well as creating new marketing and bundling opportunities. Most executives are optimistic about the longer-term benefits of integrating OTT services into their pay-TV offer: only 26 percent believe that the growth of paid OTT services will have a negative impact on the European pay-TV industry over the next five years.

3. Digital transformation is critical to future-proofing the pay-TV business
More than ever, executives agree that pay-TV operators need to transform their business in order to create and deliver the full range of digital products and services that viewers demand. However, challenges remain – over half (57 percent) believe that costly legacy platforms represent a major operational challenge to pay-TV businesses as they look to transform. Deciding when, where and how to change also remains a key challenge, as does identifying suitable partners to provide support and expertise.

4. Now more than ever, data and analytics are perceived as a business priority
The European pay-TV industry has made good progress in developing data and analytics capabilities, to support more complex businesses and to better serve their customers but many industry participants believe that there is more to do. Good analytics, coupled with automation and machine learning capabilities, have the potential to transform decision-making, improve performance and deliver far better customer service. However, legacy TV platforms and poor infrastructure remain a challenge, limiting the availability of high-quality data. Moreover, data is unevenly available across the market. Many content providers argue that the historic reluctance of pay-TV operators to share viewer data is outdated and needs to be re-thought, to facilitate the provision of better services and to support competition with the major international OTT providers.

5. Content piracy in Europe remains a challenge, yet can be contained 
Executives still see piracy as a major challenge to the pay-TV business and anticipate only a modest decline over the next few years. Just 7 percent believe that the proportion of European consumers illegally accessing content will have halved by 2024. New forms of content piracy – such as the rebroadcasting of live streams on social media platforms – are a concern, impacting churn and revenue. Participants indicated that content owners are increasingly engaged in combatting it with a combination of technology and cross-industry initiatives.