The dire consequences of the global pandemic notwithstanding, 2020 was a really good year for several industries. OTT TV, with a wild proliferation of new streaming services, is one of the accidental benefactors of the lockdown. However, despite its success, OTT TV isn’t pushing Pay TV completely out of the picture. Instead, we are actually looking at a kind of synergy. “If you can’t beat them, join them”, they say. The name of this uncanny synergy is Cloud TV. 


Nearly three out of four households in the US are now subscribing to a streaming service. In 2020 alone, streaming platforms such as Hulu, Amazon Prime, and Disney+ brought in millions of new subscribers. In the meantime, Netflix’s subscriber base went beyond the eye-watering 200M mark. 


These numbers speak for themselves. With the growing competition from hundreds of OTT TV services out there and dwindling revenues, Pay TV operators are looking for ways to overcome the challenges they are facing. 


In this article, we discuss the different strategies that Pay TV operators can use with Cloud TV, and how it may be the solution to their problems.


Pay TV in trouble

According to recent estimates, the video streaming market will be valued at $125 billion by 2025. OTT is not slowing down while cable TV has been losing ground for several years now and suffered its biggest subscriber loss in 2020. 


One of Pay TV’s strongest cards has always been live sports. But this advantage has mostly disappeared with major live events canceled due to the pandemic. Without getting what they’re paying for, many consumers are choosing to cut the cord. As a result, Pay TV, with a decimated audience and lack of content, has lost its key advantage over OTT TV. 


Pay TV and OTT: a match made in heaven?

The impact of cloud technology has been felt across many industries, and television is no different. Cloud TV is a hybrid, advanced version that combines Pay TV and OTT TV. 


The Pay TV industry is increasingly seeking help from cloud technology to deliver a better TV experience for its subscribers and regain its market share. With Cloud TV, operators get the best of both worlds: agility, openness, reach and personalization of OTT, and the scalability and reliability of Pay TV. Viewers, on the other hand, get a highly personalized live and on-demand TV watching experience – on any device. 


Some of the benefits of Cloud TV include:

  • Scalability and reliability of the cloud
  • Operational efficiency and reduced costs for TV operators
  • Easier distribution and localization of content per market
  • Data-driven TV products and advertising
  • More personalized experiences for the viewers


Cloud TV is the marriage of OTT TV vs. Pay TV which enables interactivity, personalization, regionalization, and other powerful features that are beyond the possibilities of traditional cable or satellite TV. It enables Pay TV operators to leverage the cloud-based infrastructure to deliver their services, while maintaining the scalability and the robustness of traditional TV.


Cloud TV also builds on the advertising model and technology of OTT TV, with advanced audience segment targeting and the ability to create tailored offers.


Today’s consumers are spoiled by the convenience offered by OTT. They want to choose what to watch, and when and where to watch it. The main allure of streaming services is exclusive content, advanced features such as personalization and multiscreen, and the lower cost (i.e. than paid TV alternatives). However, consumers often have to subscribe to several services to access all the content they want. This can lead to so-called subscription fatigue and the need to juggle between multiple platforms.


Cloud TV seems a perfect solution, bringing the best of both worlds – affordability and convenience of OTT, and reliability and content types typically associated with Pay TV.


How Cloud TV helps paid television

Media companies leverage Cloud TV to expand their reach and boost revenues by providing their millions of viewers a large portfolio of engaging and personalized experiences on any device. Telco companies such as Vodafone and Veon deliver live and on-demand experiences from the cloud. Their television packages combine the Pay TV offering with an aggregation of content from third-party streaming services.


#1 Cloud TV for cost optimization

The traditional TV broadcast delivery methods – satellites or optical fiber – are extremely expensive. However, Pay TV broadcasters have always been forced to use both. In the cloud broadcast model, this technology is no longer needed. This transition leads to a significant reduction in operator and network costs.


Instead of streaming everything through satellite, Cloud TV operators deliver content using – you’ve guessed it – the cloud. It’s cheaper, more reliable, and more scalable.


#2 Cloud TV means better advertising and analytics

With OTT, television advertisement is no longer based on viewer count and time of day. Instead, it’s based on demographics, psychographics, and technology. 


OTT marketing has a much higher ROI than traditional television advertising. It’s not surprising that OTT ad spend brew by 70%  between Q1 and Q3 2020.


There is an increasing demand for personalized advertising. The potential to personalize adverts to the viewer’s interests enables broadcasters to generate higher revenues. But the list of advantages of Cloud TV advertising is long:


  • More control over how and when advertising is displayed.
  • Brands can show their ads to the specific audiences based on the type of content they are watching. 
  • Advertisers can also retarget ads between all the consumer’s connected devices.
  • Data tracking allows marketers to get exact numbers on the performance of their campaigns. It reveals exactly how a lead reacts to an advertising campaign, whether the desired user action was a page visit, a download, or a sale.


#3 nPVR features

Video recording was one of the key functions of the set-top boxes. Originally, users could record TV shows and programs using personal video recorders (PVRs) integrated with their STBs. With cloud technology, this technology becomes irrelevant. Cloud TV subscribers can use so-called network PVRs (nPVR), enabling them to watch content whenever and wherever they want. The recording is made not in the user’s STB, but in the cloud. 


Service providers can offer subscribers the option to pay extra for more hours of recording.


#4 Multiple screens

With Cloud TV, consumers want more choice about where, when and how they watch TV. To respond to this need, providers look for more flexible and scalable solutions. Television went from a family experience to an individual pastime. Everyone in the family enjoys their own shows from their own device, at home or on the go. 


Cloud technology makes it possible to deliver the content seamlessly across multiple screens.


#5 Better user interface

Using a cloud-based UI, operators can respond quickly to changes in viewing habits, enabling rapid software-based updates and on-line deployments without the need for the problematic upgrades of STB firmware or hardware.


Any new features available on the STB are delivered to new platforms simultaneously. This is significant because consumers are shown to want consistency in their UI and navigation experience across all the devices they use, such as tablets and smartphones. 


Cloud TV also offers many advantages to advertisers.


#6 Scalability

Moving many core Pay TV functionalities such as PVR to the cloud enables providers to scale their investment to the viewership – without a large upfront investment. This can naturally lead to overall cost reductions, enabling providers to offer their services at more attractive prices. 



Due to the flexibility of cloud technology, which allows broadcasters to scale their resources according to demand, more providers are considering how best to integrate it into their solutions. However, adding cloud capabilities to Pay TV doesn’t mean replacing it. Instead, it’s a sensible evolution towards building a service that best utilizes the benefits of cloud: speed and scalability. This unlocks an undeniable competitive advantage to many Pay TV operators considering this option, and the ability to deploy new solutions and features faster than ever before.


If you are looking to launch a direct-to-consumer service, or a Pay TV service, we can help. Get in touch using the contact form on our website. Our experts will be happy to discuss your project.