Analyst: Pay TV providers need to build CDNs to compete with Netflix, Amazon

Pay TV service providers should invest in content delivery networks (CDNs) if they want to hold off the likes of Netflix (Nasdaq: NFLX), Amazon (Nasdaq: AMZN) and Hulu, according to Guy Bisson, research director for television at IHS.

"The pay TV industry today is facing an increasingly competitive environment that is not helped by the recent entrance of OTT services like Netflix, Amazon and others," Bisson said at the PEVE Entertainment conference in London and reported in L.A. Biz.

To fight back, he suggested, TV providers must embrace TV Everywhere and to effectively do TV Everywhere they must be able to properly control content delivery.

"If a pay TV operator is facing competition from Netflix, multiscreen represents the first step in fending off the competitive threat," Bison said. "By making pay TV less TV-centric--i.e., allowing access on tablets, laptops and smartphones, and enabling TV to be moved around the house and on the road--multiscreen becomes an attractive alternative to OTT."

CDNs, he concluded allow operators to "transition their operations into a lucrative new area (and) transform the Internet from a threat into an opportunity as well as open up new business opportunities by servicing the content distribution needs of their content partners."

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