By Peter Cox, marketing director at PerceptionTV
The telecommunications industry has experienced significant digital change in the past decade, leading to increased market competition. Customers are renowned for being extremely disloyal when it comes to mobile, fixed line and broadband services, and churn rates as high as 40% suggest the market is extremely price sensitive.
While customer loyalty in mobile, broadband and telephone is very low, pay TV services are key to gaining and retaining customers. Can telcos regain control of their revenue streams, or must they embrace changing technologies to succeed?
Latest buzz word
Quad play is the latest buzzword in the telecommunications industry. Mobile operators and cable and satellite pay TV groups are scrambling to secure services for quad play packages: mobile; fixed line; broadband and TV; to offer customers a multi-function service and benefit from cross marketing.
The quad play logic is simple; customers want to buy services from a single provider and service providers want to save costs by billing one customer for multiple services. With TV, mobile, broadband and fixed line services in one place and at one cost, why switch?
The TV industry is adapting to its changing environment too. Millennials rate new viewing options such as Netflix, Amazon, and YouTube, more highly than traditional broadcasters. Networks that supply quad play services can accommodate the viewing behaviours of a multi-generation family. Younger adults can enjoy OTT services with faster broadband, while older generations do not have to abandon preferred cable providers. Quad play meets the demands of all consumers.
For telcos that want to benefit from TV, the introduction of an integrated OTT platform is the most effective way to do it. Historically television was complicated and expensive for telcos, however, this is no longer the case.
If you have content but nowhere to host it, the first step is to implement an IPTV platform, ideally a platform with multiscreen capabilities that can deliver content to TVs, tablets and mobiles. Alternatively, if you already have a platform in place, where do you find content? IPTV content can be created exclusively by the platform owners or purchased from content providers. Both Netflix and Amazon have funded their own film and TV content but this can be incredibly high cost. For most IPTV owners looking to host varied and timely content, a partnership with a content provider would provide the best opportunities in the TV space.
Complex mix of products
To fulfil the promise of TV everywhere there are many things to consider, not least the complex mix of products that constitutes the modern TV experience.
Today’s television consists of four distinct but inter-related services. These are: live TV – watching when the programme is broadcast; catch up – being able to view programmes that have previously been aired; recording – recording programmes for playback later or to keep; on demand – watching premium content, whether it has been aired or not, at a time of the user’s choice.
The living room TV experience is dominated by these four capabilities and telcos that want to make a success of the TV market need to deliver a service incorporating them all to recreate the traditional experience.
Once they have embraced the idea of OTT, expanded to all devices and ironed out technology challenges, telcos can focus on the most appropriate monetisation model. Owners of an IPTV platform can sell subscriptions to consumers, rent the service to content providers, generate revenue on a freemium to premium basis, or sell the platform to generate profit. In 2014 Netflix made $3.4 billion in revenue from the domestic streaming business generated through a subscription model.
White label IPTV platforms offer an integrated TV service that provides an end to end solution for telcos. If companies are able to drive down costs with attractive quad play packages, consumers benefit from lower prices, simpler choices – a one stop shop for all media needs – and additional content such as extra channels.
TV can act as the anchor service for network operators, sharing its historically loyal customer base with other services. TV technology is evolving and where pay TV once competed with OTT, it is now embracing it. Operators must customise services for viewers dedicated to online TV, and pay TV viewers. An integrated IPTV platform is a simple and cost effective way for telecommunications operators to deliver an engaging new service to subscribers.
PerceptionTV offers multiscreen IPTV solutions to telco’s, broadcasters, content owners and ISPs.