Market Insight

KNIPPR - new over-the-top service in Netherlands by T-Mobile offering a-la-carte TV subscription

July 20, 2016  | Subscribers Only

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T-Mobile Netherlands has launched a standalone online TV service KNIPPR. The service offers an online platform to watch television content from some of the nation’s most popular television networks.

  • KNIPPR offers live viewing of content, as well as 7 days catch-up service.
  • The core package is priced at €10.99 per month, offering a bundle of 16 national public and commercial channels that are among the most popular in the country.
  • Customers can add individual premium channels on the a-la-carte basis. Currently there are 22 additional channels available, with the cost ranging from €0.65 to €2.99 per channel per month.
  • KNIPPR enables HD quality streams, although the quality of received content depends on the original quality of programming.
  • Service is available online through a browser, as well as through iOS/Android mobile application.
  • Big screen viewing has been enabled in July with a dedicated application for Apple TV; and Google Chromecast integration.

Our analysis

The global phenomenon of “cable-cutting” has been observed to be particularly prevalent in the Dutch market, where the number of Netflix subscribers is expected to reach 1.6 million by the end of 2016. This is partly attributed to the specifics of the Dutch television market where, according to IHS data, 98.5% of those who receive television do so through a paid subscription. Several large companies have by now recognised the potential of developing services that would offer customers a convenient way to watch national television content online, without the need to be tied to a subscription with an operator. A proposition like that could appeal to customers for the same reason as Netflix does with its instant content availability and lack of commitment, yet not compete with the international behemoth directly.

There are two services that have so far attempted to offer such innovative solution to Dutch consumers: Play van KPN, developed by KPN; and NLziet, a collaboration of RTL Nederland, SBS, and Dutch Public Broadcaster. Both of these services were released in Q4 2015, and form the primary competition for KNIPPR. So far neither of them has been able to achieve significant success, maintaining a rather low market share of the total online video market. Play van KPN failed to gain popularity due to low awareness and poor delivery on the technical side. NLziet has fared better but the service is handicapped by being restricted to the range of its parent companies’ channels.

KNIPPR intends to compete with its rivals by offering a more comprehensive list of channels available on a single platform, and offering them on an a-la carte basis. This in theory should be appealing to those wanting to cut their cable subscription in favour of a skinnier video bundle. KNIPPR will also have to indirectly compete with an extensive offering of nation’s television content that is available on the internet on ad-funded basis. This offering, however, is still limited in its content selection and inconvenient by being scattered around different portals.

In practice, however, it doesn't seem that KNIPPR is offering something that consumers will be interested in, save for the lack of cable subscription commitment. KNIPPR plays well on marketing itself for cable cutters but under closer examination, it doesn’t deliver well in terms of value proposition at €10.99 per month. The selection of channels falls short of what is offered by premium TV. Since consumers continue being tied to their internet providers, they can often extend their subscription package to include television at a lower price than what KNIPPR costs, as in the case of KPN or Ziggo. Moreover, with multiscreen offering from said providers, consumers get a more generous product which often includes a video on demand library as well.

KNIPPR has a highly compelling Apple TV application, making the service appealing for the owners of the platform, who don’t subscribe to cable television and only want a small bundle of channels.  Android/iOS version of the application, however, falls short in terms of standard of user experience and technical development. This indicates that T-Mobile has bet on Apple TV to play an important role in the market in the near future. This positions KNIPPR ahead of its mentioned competition, as none of them offer a dedicated Apple TV application. However, IHS estimates only 100 thousand Apple TV 4th gen devices installed in Netherlands by the end of 2016 making it a rather audience small for a total addressable market.

Research by Market
Media & Advertising
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