Moody's Seeks End of Linear Distribution, Full Embrace of On-Demand

Pay-TV providers and networks must abandon linear distribution and offer all programming on demand with full stacking rights, put in place better search and recommendation interfaces and start real-time targeted advertising placement aimed at viewers instead of programs in order to compete with rapidly growing over-the-top services and digital ad platforms, Moody's said in a report Wednesday on OTT Invasion. Moody's said OTT and digital ad platforms are quickly eroding contractual aggregation and bundling of content through closed-system set-top boxes as consumers embrace time-shifted, digital, mobile and subscription VOD streaming platforms. Moody's said a shift to a fully on-demand world is unlikely without content producers and distributors "lead[ing] a total overhaul [of] how the industry distributes content and advertising." But that unified approach also is unlikely, Moody's said, "meaning change will be inconsistent, stability will erode as individual network churn rises, and operating performance will come under pressure for those that stumble."