The Geneva-based entrepreneur behind this project, Lloyd La Marca, today handed the helm to the COO and his team, tasked with moving SwissTV forward, a growing competitor in TV entertainment in Switzerland.
Besides their flexible and multi-platform video on demand service, SwissTV has embarked on a strategic international expansion, offering technological solutions and services based on a white label model. This allows them to go beyond Swiss borders without having to invest colossal sums in broadcasting rights. We have put together the remarks of the Chief Operating Officer and Head of Business Development at SwissTV to learn more about the role of the company in the Swiss context, and to understand how – despite fierce competition and piracy – it is able to gain substantial ground.
How has the company SwissTV developed in recent years?
We turned our business model around three times, yet without abandoning what was achieved in the previous phase. The launch of the B2C solution involved several challenges. There were a number of barriers to overcome, particularly relating to the size of the Swiss market and the difficulty in accessing distribution channels for our hardware (i.e. the set top box we produced in order to market the first iteration of the SwissTV service). As the interface was independent from the physical hardware – what we call ‘over-the-top’ (OTT) in jargon – we began to abandon hardware production to do more software, including publishing applications on connected TVs and mobile devices. We then also launched a similar application dedicated to adult content. What’s more, we entered into an initial partnership with a cable operator as an application and content provider, thereby expanding our contracts.
Building on this first partnership, we pursued our white label strategy (i.e. as a “back-office” provider with our client-facing partner brand), and developed other similar partnerships in Switzerland and abroad, particularly with the Luxembourg post, a major triple-play operator in the country. Our third phase of development was to resell our pure technical solutions. As our rights with studios confined our activities to Switzerland and its neighbouring territories, we decided to step up our efforts on the piece of the puzzle where we control 100% of the activity and which is not subject to such restrictions, i.e. the back and front end solutions developed entirely in-house. As a result, today, SwissTV sells a proprietary technical solution, a hybrid turnkey solution for cable operators, as well as its own multi-platform video on demand service. All three are intertwined and studying even just one of them has helped us to understand and be well-informed for the next phase. This versatility currently gives us a unique and competitive edge in the industry.
How do you see the future of video on demand? In particular the future of SwissTV?
All indicators suggest that over-the-top content and consumption on demand are set to dominate in the next 5 years, largely replacing linear consumption patterns. Indeed, this is already the case for Generation Y in the US, where over 60% do not consume television other than on demand. In practice, much remains to be done. We are currently where music was in the early 2000s: the digital revolution is underway, yet the beneficiaries are not embracing this new mode of consumption, since it challenges their antiquated business model. A great deal of standardisation, therefore, needs to be done in terms of media. In terms of supply, today there is everything from buying to renting, through to monthly subscriptions and free view by way of advertising. There is no doubt that one model will take precedence over the others, but it is still too early to tell which one it will be. With regard to SwissTV, we have various rights that allow us to be flexible and fully understand the shifts that occur along the way. What’s more, as explained above, we are focusing more and more on technical services and on our role to support operators more with software solutions than with content.
SwissTV offers a range of TV services on mobile phones and tablets
What with piracy and Swisscom’s monopoly, it’s not easy to gain ground, is it?
Yes, it’s tricky. But possible. We want to prove that, every week, the number of our subscribers never stops growing. Swisscom is not available everywhere and some clients reject their subscription model. Currently, to get TV+ on Swisscom TV, you need a minimum Internet subscription of CHF 35.- per month on top of the price of the films. For this connection price with SwissTV, you’ve already got 5 films. We have never applied the fitness model where the customer pays a monthly fee and where we hope to see them as little as possible. With us, the customer pays for what he/she consumes, it’s a commercial promise. As mentioned above, we also have the advantage of having a diversified business, so compared with other services, we depend less on our offer to individuals.
Moreover, we can differentiate ourselves by offering more niche catalogues, which are less available from our competitors or on the internet; this is what we work towards and what will allow us to achieve an excellent offer by the end of the year.
With regard to piracy, we have to ask ourselves what the reason is behind it. Often, it is not someone’s reaction to an outright rejection to pay, but simply an issue of content availability: studios practise such harsh conditions that it is not possible for operators to access certain content. Try and find Star Wars, all Disney classics or Game of Thrones on a VOD service (good luck!). Since studios have no reasonable expectation in terms of prices charged by content, or arbitrarily segregate them, it is not surprising that some consumers turn to streaming or P2P. So it is therefore wrong to say: a film watched on the Internet = a film lost for operators. Of course, we hope that the future will hold conditions that make it easier to develop our catalogue for the benefit of our users.
It therefore seems entirely possible for innovative and alternative solutions, such as SwissTV, to occupy a permanent place within the sector. Where they are unable to dethrone the telecommunication giants, they can claim to present a more authentic face, which is closer to consumers’ needs and expectations. Food for thought for the market leaders!
Despite retiring from the daily business of SwissTV, Lloyd La Marca, as a majority shareholder, has remained close to management, and actively participates in developing multiple strategies for the company to adapt and evolve in an environment which is difficult to predict.
In the meantime, Lloyd La Marca runs other businesses such as Smartlink (co-founded with his brother Eric La Marca) as well as a restaurant called Le Café des Marronniers.