Next Generation Networks What A Post-Pay-TV Video Network Looks Like

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20,000 Foot View:  In the cord-cutting era TV networks are having to think about what life beyond the traditional pay-TV ecosystem might look like. With SVOD services snapping up audiences in their millions, operators are busy focusing on higher ARPU users and demanding more rights from networks but with tightening budgets. The risks of operators being disintermediated by the GAAF (Google, Apple, Amazon, Facebook) are clear, but networks face just as much threat, albeit coming from different directions. To respond, networks will have to evolve their models to accommodate multiple routes to market, audience fragmentation and technological upheaval. Next generation TV operators will compete with messaging apps to control access to audiences while networks will have to become comfortable with both iterations of their        model and emerging        solutions.

Key Findings:

• Streaming –pay-TV is simply the next evolution of pay-TV
• SVOD is growing the overall base of pay-TV subscribers, growing from        million in        2016 to        million in 2017 across the US, UK, Canada and Australia
• TV operators may end up with smaller, higher quality audiences with SVOD services gaining larger but lower quality audiences
• Premium video consumption demand will explode as content is used for differentiation by SVOD and messaging services
• It is not cord-cutting so much as a cord with more strands
• Messaging app operators are the walled gardens which TV networks need to overcome
• Netflix is positioned as the global cheerleader for SVOD but in reality it is becoming a next generation full-stack streaming platform
• Social talent is essential for authenticity among younger audiences
• Networks now have to decide with platform partners when to monetize and when to not monetize
• Next generation operators such as Amazon are now offering global scale and distribution

Companies and brands mentioned in this report: Amazon, Amazon Web Services, Apple, BBC Worldwide, Dish, Google, Facebook, Hulu, Instagram, HBO, Netflix, Snap Inc, Viacom, YouTube