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OTT ‘Offer-Surfing’ Raises Growing Concerns

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The rise of virtual MVPDs is creating some concerns for incumbents as their various free trial periods enable consumers to quickly switch from one provider to another.

That phenomenon, sometimes called “offer surfing,” is creating a “tension there that needs to get solved over time,” Sherry Brennan, senior vice president of distribution at Fox Networks, said at a CES session titled The Disruption of Internet TV: Programming Everywhere.

She said those offers could condition consumers that they don’t need to pay the freight for premium, high-end content.

The phenomenon isn’t entirely new. The practice has been common with traditional MVPDs that required longer-term contracts, but it occurred in two-year increments, noted Mitch Weinraub, director of advanced video products for Dish Network, a role that includes the development and introduction of Dish’s AirTV OTT/OTA combo product for cord-cutters that is capable of integrating Dish’s Sling TV service.

“But it’s happening more quickly now,” he said, noting that OTT TV providers let new customers sign up for free for a few days and offer services that can be cancelled at any time.

Weinraub doesn’t view that as a bad or overly troubling scenario.

“What we’re enabling is consumers to find a product that’s right for them … and customers are going to find the right [service],” he said, adding that there are ways to attract customers to OTT TV services without giving away too much.

Philo, the recently launched sports-free virtual MVPD, hasn’t seen that phenomenon taking place in the early days of its service, Andrew McCollum, Philo’s CEO, said, arguing that it’s up to the service provider to create a service that won’t be exposed to high levels of churn.

“If you’re creating a great experience, people will want to stick around,” McCollum said, while offering this contrarian view: “People don’t want to keep switching. It’s work.”

Creating a simplified experience does work as long as it doesn’t likewise involve removing important features and functionality, Weinraub said.

Still, any issues with free previews for OTT-delivered TV services are expected to become more pronounced as more players enter the fold and expand a list that now includes services from Philo, Sling TV, DirecTV Now, CenturyLink Stream, YouTube TV, Hulu, fuboTV and PlayStation Vue.

Brennan estimated that more than 50 companies with aspirations of standing up national OTT TV services have reached out to Fox about distribution, some more credible than others.