Hybrid Business Model Favored by TV Distributors (No Surprise)

TV operators and content owners say they favor a hybrid business model approach (subscription plus pay per view) to over the top content delivery, says MPP Global. Some 60 percent of surveyed distributors say they prefer the hybrid OTT model, also used by Amazon Prime and Hulu.

The hybrid model has already been adopted internationally by Amazon for its Amazon Instant Video service, as well as by Hulu for its online streaming service in the United States.

Many consumers no longer want “all you can eat” packages but instead prefer tailored and personalized bundles of content and channels they have hand-picked, MPP Global says.

Among the popular options are “skinny” TV packages that cost less.

Some distributors also are experimenting with limited-time passes. Sky, for example, offers passes for a day, a week or month for its OTT platform, Now TV.

Hybrid models have appeal because they offer a glide path from linear TV to over the top consumption; unlimited access to buying of specific items; as well as access durations shorter than the traditional month-at-a-time pattern.

At a high level, the hybrid approach will make sense since it offers the hope of a gradual, not too disruptive switch from linear to on-demand packages and business models.

Historically, hybrid models have been highly successful, allowing legacy providers to adapt gradually to a new replacement technology platform.