Increased competition from Over-the-Top (OTT) Subscription Video on Demand (SVOD) providers such as Netflix and Amazon Prime is posing significant challenges for satellite operators. Moreover, the vast amount of choice that consumers have in terms of pay-TV offerings puts pressure on operators to lower the price of their service.
Despite these issues, the satellite industry is growing. Dataxis found that between Q2 2016 and Q2 2017, the Direct-to-Home (DTH) satellite broadcasting market grew by 7 million subscribers from 238 million to 245 million compared with cable, which fell by roughly the same amount. One asset satellite can use to remain viable is Big Data. Operators have used Artificial Intelligence (AI) — more specifically, machine learning — to predict and analyze data for years, helping them better address different market segments and create more tailored subscription packages. With the explosion of OTT and multiscreen services, operators can collect an increased volume, variety and velocity of viewership data from multiple connected devices.
While big data opens up new opportunities for satellite operators, changes are on the horizon. General Data Privacy Regulation (GDPR) will come into effect across the European Union (EU) in 2018, making the extraction of actionable insights from TV operators’ viewership data both increasingly appealing (e.g., as a way to reduce reliance on third-party data for targeting) and increasingly challenging (e.g., more stringent due to regulations). With GDPR there are new obligations. Consent from consumers is absolutely mandatory, and operators are required to make their subscribers aware of the data collected at all steps of the process. GDPR has the potential to impact more than just European pay-TV audiences. In fact, it’s anticipated to act as a template for legislation in other parts of the world.
So how hard will it be to collect data once GDPR is passed? While consumers are used to providing data on the internet, it’s usually for free services such as social media. Subscribers may be more reluctant to pay a satellite operator who already charges a monthly subscription with that information. On the other hand, satellite operators have been in business for quite some time; therefore, they are generally trusted by subscribers and may have an easier time getting subscriber approval to collect data compared with OTT service providers, who are newer entrants to the pay-TV market.