The new TV landscape presents many challenges to traditional TV operators. In addition to competitive pressures from disruptive, non-traditional over the top players like Netflix, recent government rulings prompting operators to offer content via the a la carte model will quickly force traditional operators to respond with new and innovative service offerings.
A TV Lite service (another term for Skinny TV) enables the operator to offer an innovative approach to the traditional PAYTV model; a TV lite service under a managed service approach is a viable option to get to market quickly, assess new technologies and pilot a longer term strategy with minimal risk and low upfront costs.
What is a TV Lite service, and how does it differ from traditional TV? There are a lot definitions flying around in the industry, but I see it as simply a slimmed down version of the operator’s content lineup, available over an unmanaged network, at a reduced cost to the typical entry level subscription package.
In discussions with various operators throughout North America, a leaner, targeted offering of somewhere between 20 and 50 linear channels with a small catalogue of VOD for catch-up purposes has presented itself as a viable business strategy. Content would be delivered via a dongle or next generation set top box (such as the Google Nexus) so there is no dependency on a hard wired connection. In fact, all that is required is an internet connection, ultimately giving the consumer greater portability in and out of the home.
Next generation set top boxes are extremely responsive over an average Wi-Fi connection. Content streams well, so the average viewer still receives the same level of carrier grade viewing quality. The added bonus is straightforward, self-installation, which greatly reduces costs and opens up new distribution opportunities. For example, a big box electronics store could be a profitable distribution channel; an off the shelf TV service that the consumer can take home, set up and run within a matter of minutes (gone are the days of waiting for installation to arrive between 8 and 5).
Who would buy such a service? I believe, and research has confirmed, that the much talked about community of “cord cutters” and “cord nevers” would embrace a simple and low cost alternative to receive a relevant TV service. The weakness in most of the current OTT service offerings is a lack of live content. Young professionals, renters, students, and other “transient” (for lack of a better term) user communities would also be squarely in the target demographic for this type of service, as it would be much easier for the operator to reach them with an affordable offering.
This offering would also allow operators to engage user communities who may have previously been unviable due to an excessive cost of acquisition. In Canada, we have talked to operators about the cost to service remote, seasonal communities like mining camps, so this model is appealing because it allows engagement without the expense of traditional distribution.
The TV landscape is undergoing fundamental change, very similar to the rapid change we saw with the advent and quick evolution of mobile phone technology. Operators will soon be forced to break out of the normal mode of operation and embrace new technologies. The Skinny TV model presents real opportunity for operators to level the playing field with an innovative, low cost service offering.