March 9, 2021
What can pay TV operators learn from the smaller players in the streaming wars?
Pay TV operators naturally look to their direct competition for clues about how to succeed. Their aim may be to improve on their rival’s offering, to blatantly copy the competitor’s successful features, or to make sure they take a different direction in order to carve out a unique niche. But if this focus becomes too narrow, operators can forget to watch and learn from others outside our own direct sphere. With the increasing convergence of pay TV and OTT, that’s a big mistake.
With unprecedented competition from the streaming industry, many pay TV companies have looked hard at the strategies of Netflix, Disney, Amazon and the like for clues on how they can stem the trend of cord cutting. I’d argue they should also be looking closely at the lessons they can learn from smaller streaming services who are often long-term veterans of the streaming wars, with established tactics that help them survive in the face of competition from the same mega-streamers that bring cord-cutting fears to the pay TV industry.
Different content, universal challenges
That’s exactly why I firmly believe our recent whitepaper, Tales from the OTT Frontline, is such essential reading for pay TV operators. Of the six companies that shared their words of wisdom in the whitepaper, only one was a pay TV operator. And yet all six describe some struggles that are universal to any streaming service, regardless of whether they offer VOD, live events or multi-channel TV with timeshift capabilities and an EPG. These range from churn reduction and keeping a lid on operating costs to the search for new revenue streams.
So let’s take a look at just some of the key points that have enormous relevance to pay TV operators:
The churn challenge
Okay, so not every OTT service is running an SVOD business model, but Pure Flix, Topic and BroadwayHD are very much focused on churn reduction. Churning is so much easier in the OTT arena where the norm is to have no commitment beyond the end of the first month’s subscription. This has forced these companies to become really smart at keeping their subscribers.
In the whitepaper, they describe how the wealth of analytical information available through OTT applications can be used in innovative ways to reduce churn. Is your business doing enough to spot behaviours that indicate a subscriber is on the verge of dropping their subscription? And do you have the agility to use that data to drive preventative measures with targeted marketing, support or special offers?
App performance as a churn reduction mechanisms
Personally I think one of the most interesting tips in the whitepaper is about the efforts that Pure Flix is putting in to optimize their app and video load times, specifically as a churn reduction mechanism. While technologists within your organisation are likely to be heavily focused on the channel zapping speed on your STB, are they putting the same emphasis on their OTT apps? And do your marketing team join the dots from these technological efforts to your churn rate and the related return on investment for customer acquisition activities?
The search for new business models
Among the six streaming services featured in the whitepaper, the one pay TV outlier is Flow Sports, an OTT offering from CWC, one of the leading telecoms and entertainment providers in the Caribbean and Latin America. Our case study provides more detail on the end-to-end solution from 24i that allowed CWC to rapidly launch Flow Sports on multiple devices and with a mix of live sports events and VOD content.
The whitepaper describes how CWC has pivoted from using the Flow Sports OTT app primarily as a value-add for existing subscribers to the Flow Sports pay TV channel. Now it’s also being used to create valuable new revenue streams. Integrating an OTT-centric subscriber management system from 24i’s partner Cleeng to the Flow Sports app brings rapid access to capabilities like in-app purchases. It’s designed to win over a legion of new, OTT-only subscribers for CWC, and even create a future revenue stream from sports fans who are only interested in the occasional pay per view event.
What else are pay TV operators missing out on?
That’s just the tip of the iceberg when it comes to strategies and advice that pay TV operators can pick up from our OTT customers. If you haven’t had a chance to read their Tales from the OTT Frontline yet, I’d encourage you to download the whitepaper now!