We’re witnessing a wild growth of subscription services. Pay TV is slowly losing ground due to the lack of relevant content or growing incompatibility with modern customers’ needs. There is no way to stop or reverse the cord-cutting trend – pay TV needs to change, fast. The most likely scenario is smart evolution and synergy with the convenience of OTT. 


Pay TV operators must embrace and adapt to the new reality to remain relevant. Running to a predefined schedule is losing appeal to modern audiences. As a result, providers are looking for new ways to adapt to the changing reality. We will look at some of the approaches they can leverage to retain customers.


The industry needs the synergy

Pay TV and OTT could complement in great ways independently. These two distribution methods offer certain advantages but also carry some compromises. Hopes are – for the consumers and providers – to create a tech and business synergy that would blend the benefits of both and eliminate the things that set them apart.


While streaming services offer a plethora of choices, you never get all the content you like in one place, forcing you to subscribe to several services. Subscription fatigue comes in tow, not to mention the excessive cost of several subscriptions. Viewers appreciate flexibility and choice, but the mix of incompatible interfaces and user credentials you must juggle can quickly grow out of hand. Add to that several remotes, mobile apps, and the need to interact with multiple providers for billing, customer service, and technical support – a headache is granted. 


Pay TV operators need to look for ways to combine OTT with their broadcasting services. For example, their new offerings could include what consumers want: a mix of news, sports, on-demand videos and short clips. Hopes are that if pay TV providers get the chaos under control and simplify the overall customer experience – by aggregating all the content on a single TV screen – they may win their subscribers back.


DAZN – the live and on-demand sports streaming platform works on many devices

Without adapting, pay TV will be consistently losing its appeal over the coming years. For example, sports used to be the domain of Pay TV – OTT is steadily taking over. Using platforms like DAZN, you can watch matches without calling in sick the day before. 

News? People love the convenience of watching the news without having to stick around on the sofa. Advertising? OTT has taken the lead – advertisers love OTT’s advanced targeting and reporting possibilities.


How can Pay TV and OTT happily coexist (and why should they)?

The decline of traditional TV is imminent. But that does not mean pay TV will disappear completely. There are a few surefire tactics to delay the subscriber exodus, but they are only a partial solution. And evolution is needed. As always in business, great things come from knowing when to change tack, offer innovative, unique solutions, and prosper in the wake of adversity. 



Multichannel Video Programming Distributor (MVPD) provides multiple television channels. This is a great premise, but various SVOD, AVOD, TVOD, or PVOD services. OTT giants such as Netflix, Disney+, DAZN, Hulu, and HBO have a strong advantage as they do not have to maintain or invest in expensive physical hardware. Pay TV providers must start embracing the vMVPD distribution model to remain competitive.


vMVPD, Virtual Multichannel Video Programming Distributors, are OTT services that provide viewers or subscribers with a mix of VOD streaming content and Linear content from broadcast channels. YouTube TV is the most popular example – the service offers content from broadcast networks such as ABC, CBS, Fox, NBC, FoxNews, MSNBC, CNN, and other streaming providers.


Some lesser-known platforms like Zee have already started discussing launching pay-per-view services where movies will be available for rent and sale on their television network.


Other notable examples of vMVPDs include Sling, DIRECTV Now, and Hulu Live. 


Owning infrastructure as a competitive advantage

What works to the Pay TV providers’ advantage in the battle against OTT is that they own and operate networks and facilities to run their own services. As a result, they have a unique ability to control costs through network consolidation and virtualized infrastructure. 


Many network operators are already in the process of service and network transformation to reduce the cost associated with pay TV services. Those cost savings could be reflected in more competitive pricing – and possibly more attractive subscription prices.


Better deals

In general, vMVPDs providers can offer much more affordable bundles than a cable subscription. For example, Philo TV is a live and on-demand TV service that offers a skinny bundle with 60-plus channels for just $20 a month. And this is contract-free, with a 7-day free trial – and a monthly subscription that you can cancel anytime. No pay TV operator can beat that. 


Such bundles are a great alternative to expensive cable TV bundles – customers do not have to pick individual OTT offerings. Subscribing to several services just to access all the content you love will add up to an expensive monthly commitment.

Watch TV - 85 channels

YouTube TV channel offering keeps growing

YouTube TV offers 85+ channels at just $45 per month, while traditional cable operators charges over $100 per month. In addition, there are no hidden fees like equipment rental fees, extra HD or DVR fees, or other mysterious surcharges.


Licensing deals

Pay TV operators can easily build their OTT offering using the content they already license directly, unlike OTT providers like Netflix or Amazon. The coexistence of OTT and online content within channel lineups are already fueling new promotions and service bundles. And while the technology, partnerships, and industry consolidation that are making this possible are still evolving, this trend could help pay TV to survive the hard times.


The pay-TV + OTT tech synergy

However, the plus side of owning the infrastructure like set-top boxes, home gateways, and access networks is that many pay TV operators already own the infrastructure that OTT depends on to operate. 


Infrastructure is super important in the seamless delivery of OTT services. Therefore, it will become higher performing, more capable, and less expensive. This is where technology known as multicast-assisted adaptive bitrate (M-ABR) streaming comes in handy.



Multicasting is a very important reason for pay TV providers to look into OTT tech. In contrast to unicast delivery, multicast streaming generates only one stream per router edge, placing far less burden on edge aggregation and access networks during those events, allowing operators to avoid overspending on additional router capacity that might only be needed occasionally. In addition, during high-audience events like sports playoffs or championships, where more than 80% of households in a given area may watch the same program on the same channel, multicasting has the most positive impact on the operator’s last-mile network.


Adding mobile to the mix

To boost their declining revenues, pay TV providers should allow their subscribers to stream the content on their mobile phones – at their convenience. This could unlock better personalized and targeted advertising opportunities – showing users different ads based on their preferences and demographics.



In addition to network efficiency and high quality, M-ABR is another technology that allows operators to integrate OTT VOD and other content more seamlessly with their traditional multi-channel lineups and VOD libraries. This is typically accomplished through a hybrid approach – the OTT content is delivered to the set-top via a broadband internet connection. At the same time, traditional pay TV programming is sent via the cable, satellite, or IPTV network. 


The viewer’s experience is improved through the mix of content, and service quality is maintained. However, two distinct networks and content management workflows are required, making this approach more inefficient and costly.


Fast channels

Online advertising gatekeepers are increasingly paying attention to FAST channels – free ad-supported streaming TV. For example, Google has recently signed a partnership agreement with Pluto TV to show the channel through Google TV devices. 


While Pluto TV is perhaps the largest household name, it is joined by a range of services that are increasingly widely distributed. Another example is AMC Networks, which is developing six new free ad-supported FAST channels, as the company executes a targeted streaming strategy based on individual interests. Rakuten TV is now available in Europe. Services like Tubi, Peacock, Roku and Crackle are primarily offered in the FAST fashion – some of their content is paid. These hybrid services can be used to upsell more-premium content to users once they are within the content ecosystem.



The term “connected TV” covers not only the TV set itself but any device that connects to it, enabling it to stream content over the top. Examples of CTV devices include Roku and Amazon Fire TV/Stick devices. However, the term has now extended to include consoles and smart TV operating systems like Google TV or Tizen (in Samsung TVs).


CTV ads can be served dynamically, aggregated through the platform rather than the broadcaster.


Pay TV operators can be the gatekeepers for SVOD services

A cable box allows customers to sign up for OTT services through a single package and allows integration of SVOD services through pay TV STBs and platforms. By bundling third-party services, cable TV can recoup its losses as they adapt to the new reality.


As the number of streaming platforms grows, competition between these services makes it harder to grow revenue. A neutral aggregator is needed to play the role of the consumer gatekeeper. This is expected to happen over the next five years. Cheaper pay TV offerings will get bundled with a data subscription, while premium sports and movies will still be offered through regular pay TV.


The road ahead?

Traditional delivery models (cable, IPTV, etc.) should start migrating to HTTP delivery streaming with unicast M-ABR. The goal is to make broadband the ultimate single delivery mechanism for multichannel TV. Future pay TV services should combine OTT streaming with other types of content people watch.

Last words

Have questions about OTT app deployment or are interested in launching your own? Send us a message – our experts will be happy to discuss your project, helping you assess the services you need to become a future-proof and truly cloud-native OTT content provider. With the support of the BSG development team, you can push the envelope of content, OTT service models, and viewing experiences.