European, Asian TV Operators Embrace TV Everywhere with OTT

The pay-TV landscape in Europe and Asia is evolving, as operators eye digital distribution to ward off threats from over-the-top (OTT) providers and rival players. As a result, TV Everywhere services are on the rise: they now reach 66 percent of pay-TV subscribers in Western Europe, 21 percent in Eastern Europe and nine percent in Asia, according to Parks Associates.

These regions are behind when it comes to North America, where TV Everywhere coverage is at 90 percent according to Parks. Pay-TV operators in the United States in particular have led the way when it comes to rolling out those services as they try to take the OTT conversation and bend it to their behalf.

Typically, in North America the strategy has been to offer access to subscription content via computers, tablets and smartphones to the pay-TV operator’s own subscribers only, making it a perk for subscribing and a customer retention tool rather than a revenue-generator. There are a couple of exceptions to that, notably Redbox Instant by Verizon (News - Alert), which will launch in 2013 as a standalone OTT streaming subscription service for $6 per month ($8 with physical DVD rentals thrown in)—aimed squarely at taking on Netflix’ hegemony.

Parks noted that in contrast, many pay-TV providers in Europe are now leveraging their multiscreen services to offer OTT services to non-pay-TV subscribers. The U.K. satellite provider Sky is offering Sky Go, which features live TV and on-demand content, to non-Sky TV customers via PCs, smartphones and tablets, with monthly subscriptions at £15-£40. Italian pay-TV providers Telecom Italia, Mediaset and FastWEB, Romanian incumbent Romtelecom, UAE-based Etisalat (News - Alert), and South Korean cable operator CJ Hellovision have all launched video services that are available to anyone with a broadband connection. Operators with niche content, such as Telecom Serbia, have also launched new, local-language services to reach segments of consumers outside their home market.

"Now that Netflix has entered Europe and large players have acquired OTT services such as LOVEFiLM and Acetrax, the video services market will be increasingly competitive, forcing pay-TV providers to test new services and business models," said Brett Sappington, director of research at Parks, in a statement. "Operators in Europe and Asia have dramatically increased their multiscreen offerings, and some are expanding into pure-play OTT services, with offerings available outside their network footprint."

These efforts will increase as new OTT offerings throughout Europe, including Netflix and HBO, threaten operators' premium TV revenues, he added.

“Multiscreen services have seen amazing growth over the past year in Europe and Asia,” said Sappington. “Motivated by consumer consumption trends and competitive forces, pay-TV providers are positioning themselves to be players in video services on any screen. Tomorrow’s winners in TV Everywhere will be the companies that discover the right mix of business model, content availability, and quality experience.”