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Broadband

OTT TV not yet a threat to standard TV subscriptions

Friday 29 May 2015 | 11:58 CET | Background

Traditional live TV viewing is not yet a thing of the past. Most Dutch consumers still have a TV service separate from their broadband subscription. The majority say they are not ready to cancel their TV subscription in favour of an OTT service with live channels and catch-up services, according to the latest research from the Telecompaper Consumer Panel.

Two-thirds of Dutch consumers said they were not willing to give up their current TV service for an OTT proposition with the standard live TV channels (NPO, RTL, SBS). The question offered an OTT package including the live channels and catch-up services in HD going back a year without advertising, at a price of EUR 9.95 per month. 

Among those who would consider the OTT subscription, 40 percent said the most important reason was the ability to watch ad-free catch-up services. The current catch-up services from the main channels do include ads, and the cable operators cannot control how these are shown in on-demand services.

Cheaper than traditional

Over a third (37%) of those interested in the OTT offer also cited the attractive price of EUR 9.95 per month. Almost 30 percent also said they only watch the main channels included in the OTT offer, so don’t need the bigger packages offered by cable and IPTV providers.

A standard cable subscription offers around 30 channels, but costs more; for example, Ziggo charges EUR 18.70 per month. KPN also recently announced a price increase for its DTT service Digitenne, of EUR 1.5 to EUR 14 per month. These kind of basic plans don’t come with catch-up services, making our prospective OTT offer more interesting.

Multiple screens

Another reason to switch to an over-the-top live TV service is the ability to watch on multiple devices. In addition to the TV, OTT services work on any connected device, such as a tablet, smartphone or laptop. Just over a fifth of those interested in the OTT offer said the ability to watch on multiple screens (also simultaneously) was an important feature of the service. Many of the standard TV providers also offer this feature via apps provided with their TV subscriptions. These allow subscribers to watch the same channels on tablets and smartphones.

Another 15 percent of respondents said they would consider the OTT offer as they don’t want to be tied to their current TV provider. The OTT subscription appears to offer more flexibility, as this type of service is often available on a month-to-month basis, without a long-term contract.

TV the traditional way

In the much larger group of consumers not interested in the OTT offer, 55 percent said they want to keep watching TV in the way they are used to. Likely many find the ‘new’ way of watching TV online awkward and prefer the ease of a remote control zapping through a list of channels on the linear TV service. 

Almost a third said they also want access to additional channels not offered in the OTT deal, such as the BBC, Comedy Central and regional broadcasters, and around 5 percent said they wanted to keep premium packages like HBO or Fox Sports. 

Another fifth said they find EUR 10 per month too expensive for what’s offered in the OTT service. They may have a point here, as the NPO channels are already available free online. Ziggo does not offer a broadband subscription without TV, so its broadband customers are unlikely to find the OTT offer cheaper. Its service also comes with the Horizon Go app for watching TV online or over mobile devices. Internet-only customers at KPN and Tele2 may find the OTT offer more attractive, if they are OK with only the standard channels.

A smart TV or streaming device like Apple TV or Chromecast is needed to watch an OTT service on a standard TV screen. HDMI/USB adapters like Chromecast also need a connected tablet or smartphone. Five percent of the respondents not interested in the offer said this was because they did not have the required equipment.

OTT subscription on the way

While there appears some interest on the market in an OTT offer with live TV, no such services are offered yet. KPN announced recently that it’s planning an OTT service called KPN Play, which will include on-demand films and series as well as a number of live channels. The service will be available to the entire market, not just KPN broadband customers. A Play app will make the service available on iOS and Android devices too, and Chromecast support means it will work on TVs. Further details, such as the price and channels available, have not yet been disclosed.

 

This research is based on the Telecompaper Consumer Panel. The survey was conducted in April and May 2015. Panel participants are aged 12-80, and results are stratified according to age, gender and education. For more information about research opportunities with the panel, contract research@telecompaper.com.

 

 



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