|
Contributors | Messages | Polls | Resources |
|
Premium vs. Skinny Bundles: A Balancing Act for Pay-TVLondon -- TV Connect 2017 -- With younger audiences increasingly cutting the cord and turning to skinny bundles, how can pay-TV providers best balance premium services and low-cost bundles to grow their market? This was the question Stuart Thomson, editor of Digital TV Europe and moderator of the session, put to his panelists. Will Ennett, head of TV content at UK service provider TalkTalk , said that the operator was positioned more at the "value" end of the price segment for TV and broadband. "Most people buy TV and broadband [as a bundle]," according to Ennet, "So we must cater to that." In addition, he stressed fairness and affordable pricing was essential. Part of that meant creating bundles that were smaller than other pay-TV providers in the UK. He said that the £5 to £15 price point worked best for its customers. If they wanted bigger TV bundles, in his opinion, they will probably go to Sky or Virgin. Not that TalkTalk doesn’t offer premium content, he added hastily. It's just that most of its customers choose smaller TV packages. Thomson then asked him how he could generate revenue given the availability of free-to-air TV services in the UK. Ennett felt that the key was to first create a great experience for customers, to keep them happy. "Operators need to improve their brands, improve their customers' enjoyment of great content, and they will not churn," he said. According to him, ARPU would naturally segregate customers. Content-centric users would naturally take the higher-end box and premium options. And again, he stressed the increments should be small, citing a £5 DVR box. And there are also transactional services as well, which increase spend. Mark Giesbers, vice president of entertainment products at Liberty Global Inc. (Nasdaq: LBTY) (LGI), agreed entirely with this: "Yes, segments should be served with a simple option, with lower ARPU. Then they can add-on and upgrade." He did say though that there were differences between Western and Central and Eastern Europe, pointing out that LGI provides services in 12 European markets as well as 18 in LATAM and the Caribbean. ARPU was definitely higher in Western European markets, but the boundaries are starting to blur. He felt competition was coming in via OTT players everywhere, and they offered their services with very simple plans, the same for everyone. Giesbers felt pay-TV providers could learn from that simplicity. "We can offer simpler choices and packages," he said, "maybe even fewer choices, but allow flexibility to move [up or down]." He felt it was important that the bright, shiny technologies were not kept only for the premium subscriber, especially since new technology was helping operators deliver new features without breaking the bank. The DVR is an example, where now cloud-based recording allows operators to offer DVR services without taking on the capex of high-end set-tops. It's also a matter of time: Giesbers mentioned that LGI had launched its Replay TV app, a feature that allows viewers to go back in time using their program guide, and watch shows on demand that have aired previously. Initially this was launched in Belgium only, and it proved popular. But now it's being rolled out to more markets and is available on multiscreen services as well. He also said that new features can help differentiate from competition, so there was another reason to push out new features rather than restrict them to a premium tier only. But he also pointed out that there are costs associated with new services, so everyone will never be able to have everything. Medea Nocentini, senior vice president of strategy at OSN, had a different point to make. OSN is a pay-TV provider in the middle-east and north Africa, serving 24 countries in the region. It offers a satellite pay-TV service as well as VoD and OTT services, some of which are tied to the pay-TV package and some that are aimed at non-subscribers. She talked about how OSN was launched as a premium service, with a comparatively high-price. It was a simple proposition, and gained subscribers steadily. But there are only so many households able to afford it, and soon the operator had to start looking at ways to expand beyond the high-end segment. However, in its developing markets, the disparity between the wealthy and the next tier of income was quite significant. The company also found that even when income and willingness to pay decreases, customers want the same options. OSN had to completely rework its pricing and packaging, and relaunched just at the beginning of March. Nocentini said she was pleased with the product launch, but said it still didn’t solve the problem of millennials, who "want to pay nothing. For them, it's either YouTube or piracy," she said, noting that 60% of the population in OSN's region was under 35 years. Robert Dube, vice president of VoD at RTL Interactive (a division of RTL ), was fortunate that his service is offered for free. But he also said that he offered additional SVoD content for €2.99 per month, which was being picked up. He also talked about a show that RTL offered at €7.99 per month -- just the one show -- and it had thousands of subscribers. So if the content has value, it gets picked up. He also stressed the importance of the user interface (UI). Content discovery was essential for consumers to access good content -- it doesn't help to have great content if no one can find it. Ennet agreed, citing the new UI rolled out by YouView, which provides the platform for TalkTalk. It is a very simple UI, still very linear but has helped with every segment across TalkTalk's customer base. He stressed that a good UI will bring higher engagement and usage. And Geisbers agreed, citing the Netflix UI and admiring the way in which it allows users to find their preferred content. Again, he felt that was an area where operators could learn from Netflix. He also felt that it was important to integrate Netflix into the operator's line-up, saying "it took us a while to get our thinking this way but now we are partners. Basically, customers want this content. So if interests align, then it is sensible to add them." He felt the same way about offering skinny bundles, saying that they appeal to a segment and so operators should look to cater to them. Nocentini agreed but felt that this was challenging TV economics, eroding them too fast. The panelists all largely agreed that you need to start low, and build-up ARPU from there. But it did seem they were flummoxed by the millennial generation, caught between their demands for lower costs and those of media companies with large channel bundles pushing for higher carriage fees. Nocentini put it best: "We are middlemen, stuck between content providers who are selling and in traditional packages and consumers who want very cheap services, or at least are very price-elastic. Until we find a way for the full value-chain to align, the economics will remain challenging." — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
Contentious issues that are likely to fuel lawsuits and angry blogs in the coming year.
Content producers are unhappy with the advertising approach and revenues they are getting on Facebook Watch.
OTT video usage is driving the penetration of various Internet connected devices to help view online streams on the larger TV screen.
Major Hollywood studio to trial 'virtual' movie theaters using head-mounted displays.
Network technology vendor Sandvine has found that piracy isn't only hurting network operator profits – each pirated set-top box is also using up 1TB per month in 'phantom bandwidth.'
On-the-Air Thursdays Digital Audio
ARCHIVED | December 7, 2017, 12pm EST
Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
|
|
||
Telco Transformation
About Us
Contact Us
Help
Register
Twitter
Facebook
RSS
Copyright © 2024 Light Reading, part of Informa Tech, a division of Informa PLC. All rights reserved. Privacy Policy | Cookie Policy | Terms of Use in partnership with
|