Pay TV operators and broadcasters must say goodbye to ‘one size fits all’ services and diversify their content offer and their market reach, as well as the way they distribute content, in order to thrive in the years ahead. That was the message coming out of Connected TV World Summit in London on the first day of this thought-leadership event. Nick Herm, Director of Strategy at Sky, outlined his company’s initiatives to segment the market more precisely, with the standalone OTT service NOW TV aimed at the low-ARPU pay market (what is generally referred to as Pay TV Lite), Sky+ catering for the established Pay TV market and Sky Q, with its ‘fluid’ any-screen user experience, now available for the more demanding customer.

He also pointed out that while 20% of viewing on the Sky platform is now recorded or on-demand, and this figure grows year-on-year, linear TV remains the majority of viewing and the trend towards reduced linear viewing is moderating. “Linear will be an important part of viewing for a long time to come,” he declared.

He also highlighted the vast differences in how different demographics behave within the total subscriber population. In some demographics people are spending more and more time on non-TV devices or watching on-demand. But among retired people there is a strong interest in news and sport and, despite the presence of DVRs, they spend 95% of their time watching ‘live’. There is also an emerging group of customers in their 20s and 30s who are professional and work hard and are time-poor, and they like watching movies but they are not keen on sport. For them, well over half their viewing today is on-demand.”

‘One size does not fit all anymore. Consumer habits are changing but at different speeds and if you want to be a mass-market player you have to cater for all these different groups. We think that is a big opportunity. We want to provide different things so people can pick and choose according to their budget and their habits.”

In Denmark, Pay TV operator Stofa is reaching out to consumers who question the value of even the skinniest TV bundle but, in a dramatic move, it is trying to do this via the traditional set-top box platform. As you can read elsewhere, the company is about to launch a true a la carte model where you pay on a per channel basis. The new model means you can rent or buy a set-top box from Stofa and subscribe to just one channel, on a one-month basis, if you wish.

There is no basic package as a starting requirement. This is not an experiment but a full commercial launch. Thomas Helbo, CTO at Stofa explained: “The aim is to change the perception of consumers who think that they have no choice when paying for bundles. Now they have a choice and if they want a bundle because it is better value for money, then that is good.

“We need to stand out from the crowd,” Helbo added. “We have been offering skinny bundles for years but we carried out a consumer survey and there were two very clear statements: we pay too much and we pay for channels we do not want.  People did not want to pay for the channels they do not watch.”

Asked whether the product mix could be diversified further, Simon Frost, Head of Media Marketing and Communications at Ericsson, suggested there may be a chance to ‘sell-through’ to more than one bill payer in a home now that so many people have individual viewing devices. “In the connected environment we might see teenagers paying for channels that they are interested in that their parents will not pay for. So there is a greater sell-through opportunity; a segmentation in the home beyond Dad and Mum [making the purchase decisions].”

Broadcasters are also innovating in order to reach out to new market segments, notably to the famed millennials. Jette Nygaard-Andersen, EVP & CEO Central European Operations, and CEO Broadcasting Product & Technology at MTG, the pan-European broadcast group, explained how her company has been diversifying its business thanks to investments like the 74% share acquisition of Turtle Entertainment, the world’s largest e-sports company known for its ESL brand, and the acquisition of DreamHack.

She showed footage from the recent Intel Extreme Masters Championship that attracted 120,000 gaming fans over three days in Katowice, Poland, including an arena packed with youngsters watching their peers playing games live in competition. She suggested every ‘non-millennial’ should visit the event to witness the passion. “Many media executives have realized this is a sport and that audiences are growing exponentially,” she added.

MTG has also been investing in MCNs so that it has a presence in the millennial market, and Nygaard-Andersen explained that this is all about viewership. “This is where the millennials hang out, where we get new ‘digital’ stories and where we get access to new distribution platforms. These investments give us the eyeballs and access to fantastic storytelling. It gives us the chance to be a ‘digital’ storyteller.”

Alejandro Cassel Gomez, Lead Consultant for TV at KPN, noted the market opportunity for standalone OTT services from [traditional] service providers in the Netherlands that led to the launch of the Play offer from his company. “There are different groups of customers with different needs: not everyone needs a traditional set-top box and more and more customers are using other devices to enjoy TV. We can apply the learnings of the OTT world to ours.” Cassel Gomez explained that the service had a dedicated group within KPN working on it, aiming to be more agile in order target younger people.

He also highlighted the demand among KPN customers for Netflix – and the response was to integrate the SVOD service into the IPTV platform. Proximus, the Belgian telco and IPTV provider, has also integrated Netflix and Stephanie Rockmann, Director for Content and Media at the company, declared: “We love OTT. We see ourselves as an aggregator of content; we connect people with what matters to them. We integrated Neflix last year and it has been brilliant, exactly the kind of seamless service we want to offer customers.”

Michael Lantz, CEO at Accedo, which provides UEX and apps development including all the client and back office lifecycle management, believes the user experience must now reflect the diverse behaviours within the television viewing population. This means more dynamic UEXs, with some features more prominent depending on the way you watch TV. “This is an excellent way of improving customer satisfaction,” he argues.