CES 2018: ‘Offer Surfing’ of OTT TV Services a Growing Concern

Free promo periods enable consumers to hop from one virtual MVPD to another
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Las Vegas -- The rise of virtual MVPDs are giving programmers new ways to reach audiences, but they are also creating some concerns as their various free trial periods enable consumers to quickly switch from one provider to another.

Read More: Complete Coverage of CES 2018

That phenomenon, sometimes termed “offer surfing, is creating a “tension there that needs to get solved over time,” Sherry Brennan, senior vice president, distribution at Fox Networks, said here Monday (Jan. 8) at a session titled The Disruption of Internet TV: Programming Everywhere.

She said those offers could condition consumers that they don’t need to pay the freight for premium, high-end content.

The phenomenon isn’t entirely new, as it was also present when the market was home only to traditional MVPDs that required longer-term contracts, but it occurred in two-year increments, noted Mitch Weinraub, director of advanced video products for Dish Network, a role that includes the development and introduction of Dish’s AirTV OTT/OTA combo products for cord-cutters that is capable of integrating Dish’s Sling TV service.

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“But it’s happening more quickly now,” he acknowledged, noting that OTT TV providers let new customers sign up for free for a few days and offer services that can be cancelled at any time.

Weinraub doesn’t view that as a bad or overly troubling scenario.

“What we’re enabling is consumers to find a product that’s right for them…and customers are going to find the right [service],” he said, adding that there are ways to attract customers to OTT TV services without giving away too much.

Philo, the recently launched sports-free virtual MVPD, hasn’t seen that phenomenon taking place in the early days of its service, Andrew McCollum, Philo’s CEO, said, arguing that it’s up to the service provider to create a service that won’t be exposed to high levels of churn.

Related: Philo Unleashes Entertainment-Focused OTT TV Service

“If you’re creating a great experience, people will want to stick around,” McCollum said, while offering this contrarian view: “People don’t want to keep switching…It’s work.”

Creating a simplified experience does work so long as it doesn’t likewise involve removing important features and functionality, Weinraub said.

With Philo, “We tried to lead with the product, lead with the experience,” McCollum said.

Still, any issues with free previews for OTT-delivered TV services are expected to become more pronounced as more and more players enter the fold, and expand on a list that now includes packages and services from Philo, Sling TV, DirecTV Now, CenturyLink Stream, YouTube TV, Hulu, fuboTV and PlayStation Vue.

Brennan estimated that more than 50 companies with aspirations for standing up national OTT TV services have reached out to Fox about distribution, some more credible than others.

“The future is uncertain” with respect to TV, Saul J. Berman, chief strategist, VP and partner at IBM Global Business Services, said earlier in the panel. “A lot of the value is going to shift,” he added, noting that it all ties back to a “digital reinvention” of the industry that will determine who gets (and doesn’t get) the money.

And that trend is also helping out a growing group of SVOD services, including Turner’s FilmStruck, that don’t focus on multichannel service, but on new and catalog content in genres that are of specific interest to the consumer that can be delivered OTT to a wide range of mobile and TV-connected devices.

“The future for branded content owners is fantastic,” Soumya Sriraman, president, North America of BritBox, an SVOD service focused on British television, said. “You now know it’s possible to get content to the people who want it.”

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