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Content is king! So much so that the tech giants (a.k.a FAANG – Facebook, Apple, Amazon, Netflix, Google) are allocating huge budgets to acquiring original content. They want to get into the TV space. But what does this mean for the pay-TV industry? Is it simply supply and demand? Or will inflating content values reach bursting point?
The pay-TV industry is continually evolving to meet the changing needs of its consumers.
As we have seen countless times in the past, consumer demand for live sports is at an all-time high. This content makes it both a key differentiator for pay TV operators and a cornerstone for pirates. These illegal service providers offer thousands of sites providing illegal live sports content attracting millions of viewers. In addition, the eagerness of consumers to watch live sports content means that they not only require, but expect an optimal viewing experience.
Forensic watermarking is an essential part of any anti-piracy program. The best approach is an end-2-end solution, combining watermarking technology with proactive detection and enforcement services. Yet we’re seeing a distinct split in how watermarking is implemented. Content owners and pay-media providers sometimes see things differently.
Let’s start with the product.
With consumers as the common denominator, it’s not surprising that similarities can be seen across some industries. In the media industry, the need for change to keep up with changing consumer demand is widely accepted. But what is the formula for success? Can any parallels be drawn with online retail?
Online’s disruptive nature
It was a Forbes article that made me think: ‘The inconvenient truth about e-commerce: it’s largely unprofitable’. It explains that e-commerce has been disruptive. The radical shift online is presenting challenges
The Irdeto global consumer piracy survey is the largest ever conducted. With over 25,000 adults across 30 countries participating, it provides unique insight into the dynamics of online piracy. Comparing the youngest age group (18-24) and the oldest group (over 55) we can see the differences but also some surprising similarities.
There’s lots that we can pull from the extensive data, but let’s just focus on a couple of angles.
Operating a pay TV service used to be (relatively) simple: encode your content, then encrypt and deliver it with a key over closed networks to set top boxes. But the road to a TV Everywhere offering is much more difficult, with roadblocks driving up total cost of ownership.
A tricky road to TV Everywhere
There are many barriers to combining pay media services on broadcast and OTT. Content now has to be encoded, encrypted and stored in multiple resolutions, using different containers and DRM combinations.
Despite ongoing predictions of cord cutting/shaving, STBs still securely deliver pay-TV content into the majority of homes. But TVs are becoming smarter by the day and device manufacturers would rather sell a new TV than a “cheap” STB. This is not new, but will this year be the one when the big screen wants a bigger role?
What would it take?
In essence the TV would need to take over all of the duties performed by the STB.
Online piracy is a highly sophisticated operation that often spans different countries and jurisdictions. Trying to tackle this on your own will have limited effect. To have an impact means working together.
Hare and the tortoise
Online piracy is one of the biggest threats facing pay-media providers and content owners. It’s a growing pandemic problem and not easy to solve. Pirates are continually adapting. Unhindered by rules and regulations they move at internet speed.