New Report Highlights Intensifying Battle between Traditional Media
Providers and OTT Content Services
Cooperation between telcos and traditional media can ease the pressure from pure play
OTTs

Shifts in media consumption are driving significant changes in the content delivery
marketplace

OTT (Over-The-Top) content services such as Netflix are challenging traditional TV and radio
providers

Established players should consider launching their own OTT services

By offering valued added services to both traditional and emerging players, telcos can
capitalize on this competition and return to growth
Paris, 19 May 2015 - Strategy consultants Arthur D. Little and Exane BNP Paribas have jointly
published ‘How to ride the OTT wave’, the 14th edition of their annual report on the European
telecoms and media industry. The report focuses on the intensifying battle between traditional media
providers (free-to-air, pay-TV and radio) and OTT (Over-The-Top) content services such as Netflix
and Spotify, and looks at the likely market scenarios over the next few years. It predicts that telcos
have a key role to play in this battle by offering services to both established and emerging media, with
the growing demand for super-fast broadband kick-starting revenues once more.
More than 110 industry executives from 17 countries were interviewed for this report, which can be
accessed here: www.adl.com/TelcoMediaOTT/
Shifts in media consumption driven by the rise in connected devices such as smartphones and tablets
are creating a new playing field in content delivery. This has led to traditional TV and radio providers
facing growing competition from pure play OTTs, with two-thirds of interviewees believing that pay-TV
providers will suffer as a consequence.
However, the report predicts that not even Netflix will have the scale to compete with pay-TV leaders
such as Sky or Canal+ for the whole range of their content line-ups. Nevertheless, experts anticipate
that the battle between traditional and emerging players will continue to inflate overall content costs.
While there are serious threats to traditional media, particularly for smaller TV channels and low-end
pay-TV, established providers could counter OTT competition by partnering with telcos and launching
their own OTT services, leveraging key assets such as brand, relationships with content providers,
technical skills, and the intimate and long-established relationships they have with their customer
bases.
“While in the short-term, we believe that traditional players will be ready to meet the challenge posed
by OTTs, a select number of OTTs could reach the scale necessary to compete with pay-TV on
premium content,” says Bertrand Grau, Principal at Arthur D. Little in Paris and author of the
report. “However, there is a window of opportunity for traditional media to partner with telcos to
improve their respective position vs. pure play OTTs.”
Telecoms operators stand to benefit from the rise in online video usage in a number of ways:
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Charging premium rates to customers for faster speeds and/or data traffic
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Monetizing their network assets with global OTTs by charging for guaranteed quality of
delivery
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Generating revenues as direct players in online video, music and/or pay-TV, or by partnering
with existing players
As such, the report is positive about revenue generation in the telecom industry: “For the first time in
three years, optimism has returned to telecom executives across Europe, with a majority expecting
the sector to return to revenue growth. We expect a progressive stabilization by 2016, and then a
return to growth from 2017 – at a rate of approximately 1% per year,” says Antoine Pradayrol,
analyst at Exane BNP Paribas and principal contributor to the report.
NOTES TO EDITORS
About Arthur D. Little
Arthur D. Little has been at the forefront of innovation since 1886. We are an acknowledged thought
leader in linking strategy, innovation and transformation in technology-intensive and converging
industries. We navigate our clients through changing business ecosystems to uncover new growth
opportunities. We enable our clients to build innovation capabilities and transform their organization.
Our consultants have strong practical industry experience combined with excellent knowledge of key
trends and dynamics. Arthur D. Little is present in the most important business centers around the
world. We are proud to serve most of the Fortune 1000 companies, in addition to other leading firms
and public sector organizations.
For further information, please visit www.adlittle.com
Copyright © Arthur D. Little 2015. All rights reserved.
About Exane BNP Paribas
Specializing in European equities, Exane is active in three businesses: Cash Equities; Derivatives and
Asset Management. The 2004 agreement with BNP Paribas, renewed in 2015, grants Exane
exclusivity on European cash equities under the Exane BNP Paribas brand. Exane BNP Paribas is
one of the fastest-growing brokers in Pan-European equities. The group continues to invest in both
research and execution, to provide independent, fundamental pan-European companies and industry
research, for which we ranked No.4 in the Extel pan-European survey 2014. Many of our analysts
have worked within the industries they follow and rigorous financial analysis underpins their qualitative
work. For more information, please visit www. exane.com
Contacts:
Sue Glanville/Cate Bonthuys
Tel: +44 771 5817 589/ +44 774 654 6773
sue@catalystcomms.co.uk / cate@catalystcomms.co.uk