Hitesh Lokhandwala, General Manager-India, Nagra

The pay-TV industry has undergone a period of change and development over the last few years with intensifying competition and business model disruption. The industry is seeing strong growth in Asia – in 2016 alone, there were almost 160 million pay-TV subscribers in India and this number is only set to increase. However, traditional pay-TV platforms are being challenged by the rise of video-on-demand (VOD) and over-the-top (OTT) services, with new players such as Netflix, iFlix, Hooq, and Viu vying for a slice of this lucrative market.

The pay-TV industry in Asia-Pacific is highly fragmented and it poses a significant challenge to providers who are looking at developing viable new offerings for customers. Emerging and advanced economies are also at varying stages of evolution, largely due to their differences in disposable income, demographics, consumer preferences, maturity of technology infrastructure, adoption of digital, as well as the penetration of broadband and pay-TV.

Here are the top trends that will shape the pay-TV landscape in 2017.

From analog to digital. To provide customers with enhanced services in the form of high-quality programs and meet regulatory requirements on analog switch-off, pay-TV providers across the region are expected to transition toward digital broadcasting. This will be seen across countries such as Singapore, Indonesia, Thailand, Philippines, and Vietnam.

Greater collaboration between pay-TV and OTT providers. Asia-Pacific's OTT video industry is developing rapidly – with around 100 million people subscribing to online video services in 2015. This is coupled with the evolving consumer appetite for multiscreen viewing options. We expect more collaboration between pay-TV and OTT providers as a way to enhance their core TV service offerings and integrate OTT into their hardware and infrastructure.

TV user experience (UX). Modern consumers are looking for a seamless, easy-to-use TV experience combining linear and on-demand viewing across all screens. To remain competitive, pay-TV providers must integrate the technology ecosystem into a rich UX that delivers the same services across all screens.

Flexibility and personalization of packages and offerings. Contract obligations for large channel bundles are losing traction, and one-size-fits-all business models are no longer a viable option. To connect consumers with the content they love, pay-TV providers are adjusting their business models with new offerings, including skinny bundles and a la carte options such as app-based services and TV Everywhere offerings.

Diversification into adjacent services. Service providers will also explore diversification into adjacent offerings, including dynamic data-driven advertising and smart home solutions (such as in-home security and automation). These new services will be driven by large telcos and service providers. Further investments are expected from advanced providers looking at leveraging their own network infrastructure to develop new monetization engines.

A broader and bolder approach to content protection. The growing trend of streaming premium live TV channels and 4K content over the Internet is forcing pay-TV operators and content owners to revisit their content security policies. This means expanding beyond protecting distributed content over any network to incorporating cyber-security media services and forensic watermarking into their portfolio.

Local and regional programming. While the market for global content remains strong, quality local and regional content will serve as a key differentiator in an increasingly competitive marketplace. The Pay-TV Innovation Forum research found that Asia-Pacific is characterized by high levels of cultural and linguistic diversity, with consumers having strong preferences for local language content. To cater to diverse customer needs, it is critical for operators to incorporate both local and global content into their business framework.

In an increasingly fragmented market across Asia-Pacific, innovation driven by consumer needs will be a key tool in the arsenal of pay-TV operators, both big and small. Operators who can offer their customers greater choice and value will flourish in 2017 and beyond.