Is the rise of OTT an imminent threat to cable TV/ DTH or not?

Abstract

Our study aims to determine whether OTT is an imminent threat to Cable TV/ DTH and will Cable TV/ DTH be able to survive the rising competitive pressure from digital content? For this, we have resorted to both secondary and primary research in our study. We have analyzed the OTT industry and the factors for its rapid growth rate in recent times. We have also contrasted this with the degrowth in the subscription revenue for Cable TV/ DTH operators. Then we moved on to primary research through surveys. The data from the survey was used to conduct an analysis of user preferences and factors that swing those preferences using univariate and multivariate analysis. We surveyed respondents to rate seven different dimensions of user needs with respect to fulfillment through different mediums. OTT outperformed Cable TV on all seven aspects of gratification: information, relaxation, amusement, value for money, convenience, content quality, and language. The biggest difference between TV and OTT niche breadth measurements is the convenience dimension, niche overlap metric, which was used to detect the perceived similarity or overlap between TV and OTT across the seven satisfaction dimensions, shows that TV and OTT have the the most similarity in the relaxation dimension and the least overlap in the convenience dimension. Further to understand the pricing threshold we deployed the Van Westerndop model, and we observed that respondents valued the services based on the quantum of offerings. The conclusion of our study was that OTT’s rise is imminent but not really a significant long-term threat to Cable TV/ DTH because people have rising preferences for both Pay TV as well as OTT. Factors like individual subscriptions, and low affordability restrict the growth of OTT. Emerging options of bundling where DTH providers offer both TV and OTT subscriptions seem preferable to users. Additionally drawing a parallel from the USA, the shift of DTH providers to offer broadband services may help in improving revenue as well as margins for DTH providers.