The rise of over-the-top (OTT) applications and content is proving to be a threat to pay TV operators, in general. Among the pay TV operators, cable TV (CaTV) providers are more exposed to the OTT effect as cable has been losing its foothold in advanced markets in Western Europe and North America with subscriptions dwindling for quite some time. Indeed, Dutch cable operator Ziggo blamed the increased competition from video content providers such as Netflix for the loss of about 16 000 digital pay TV subscribers earlier this year. CaTV players have since opened up their networks to third party OTT players as a counteroffensive and set-top boxes are becoming an important medium for this strategy. For example, Spain’s Ono, Sweden’s Com Hem and UK’s Virgin Media are already using TiVo STBs banking on the box to deliver advanced TV features as well as integrating web content (such as OTT apps) with linear programing. Netflix, a popular video streaming provider, is available in Virgin Media’s and ComHem’s TiVo STB.
A few CaTV operators have reported some success on their STB strategy: Ono reported that 40% or 323 000 of its total customer base has TiVo, Com Hem managed to attract 38 000 TiVo customers and Virgin Media, about 2m TiVo users. However, it remains to be seen whether this would be enough to cushion CaTV contraction amidst the OTT video threat.