Digital convergence opportunities for telcos: Monetising on the entertainment quotient with IPTV
By : Ashutosh Patel
AGM – Product Management and Marketing
Telcos across the globe are launching a broad range of digital services to counter the threat of OTT (over-the-top) players’ encroachment upon the traditional telco revenue streams. IPTV (Internet Protocol television) presents a special advantage for telcos to leverage their distinct assets and capabilities. Ubiquitous networks coupled with extensive insights on their millions of customers would enable telcos to deliver personalised and contextual entertainment services. This will not only create new revenue streams but also improve monetisation with the existing ones.
Opportunity to take digital strides with IPTV Services
The rising trend of digital content consumption on mobile and Smart TV, especially the rich media (in particular, video and TV), continues to be the most important area of focus for telcos globally. This offers telcos with a rare opportunity to own critical pieces of customer experience around digital entertainment by augmenting their existing voice and data services with digital services such as IPTV with relevant content portfolio. However, the challenge for telcos would be to match and exceed expectations already set by digital stalwarts like digital video aggregator platforms (Youtube, Vimeo, etc.) and OTT players (Netflix, Hotstar etc.) by delivering relevant and contextual IPTV content to consumers.
The lucrative IPTV market trends for telcos
IPTV has been gaining popularity over the traditional TV as a source of entertainment given the flexibility it provides to the viewers and also due to an increase in access to the broadband services in Asia-Pacific market. The global IPTV market is expected to touch $79.3 bn by 2020 with a CAGR of 18.10%. There are different players across geographies offering IPTV services. AT&T U-verse, Verizon FiOS TV, Deutsche Telekom’s T-Home, Belgacom TV, France Telecom’s MaLinge TV, Telecom Italia’s Alice Home TV, British Telecom’s BT Vision and American Movil’s Claro TV etc.
It’s not just IPTV it’s MYTV
Mobile, or for that matter a tablet, being a more personal device than TV or even PC, allows consumers to expect an ultra-personalised entertainment experience around their habits and lifestyle. The viewing behaviour of the consumers has evolved from watching the original episodes of their favourite series, events or live matches to a time-shifted viewing to a delayed viewing supported by a DVR (digital video recording) backup. In addition, the viewers also collaborate and engage on social media platforms to search for their favourite program, movie or star cast and share their views with other viewers on various elements of programs. While meeting consumer expectation is a tough ask but the flipside for telcos is that once rewarded with a superior experience, consumers not only spend more but also become evangelists and recommend their friends and families.
Ride on consumer insights to succeed in IPTV
With content being the king in the future of digital entertainment, telcos providing IPTV services, can not only become content providers by entering into exclusive partnerships with the producers, but they can also provide accurate measurement of different programs to the broadcasters to further strengthen their programming strategy.
Moreover, there are many core marketing use-cases for telcos to create tangible top-line impact through accelerated IPTV adoption among subscribers because telcos have the ability to be a key player in IPTV services by leveraging the consumer insights that lies beneath the heaps of data that is generated every day. With advanced classification techniques and machine learning algorithms telcos can not only gain insights on product and pricing analytics like bundling and unbundling while designing bouquets of channels but they can also create behavioural segmentation such as movie lovers, VOD (video on demand) enthusiasts, sports lovers, evening watchers, GEC (general entertainment channel) regulars, events trackers, leisure lovers, niche ninjas and so on based on the distinct characteristics that the segment associates with.
Comprehensive lifecycle marketing of IPTV services
Just like traditional services, a Marketer, running an IPTV service, needs to take a lifecycle value maximisation approach to IPTV services. This mandates analytics-driven personalisation and real-time contextualisation along with the ability to engage with the customer at the right moment. Following are the major categories of the objectives that guide analytics driven roll-out of different offers.
Cross-Sell: A marketer planning to cross-sell offer of sports HD pack to capitalise on the forthcoming EPL needs to identify the probable takers. Some of them could be the consumers watching sports genre at least 90 minutes a week and also showing affinity towards HD channels by having HD packs for GEC genre. This along with the AON (Age on Network) of subscribers and their NPS (Net Promoter Score) could help refine the target segment even further.
Up-Sell: A marketer intending to upgrade the subscribers with basic packs needs to look into the subscribers with higher viewing time per week coupled with their behaviour which establishes their interest in viewing a diverse set of channels across genres. That will help one to promote extra channels under advanced packs across different genres to capture their interests and increase the offer uptake rate.
Retention: A marketer can spot at-risk viewers by observing a drop in the overall viewership time or inactive long timers to send revival offers. An early warning system can detect drop from one category or one channel as a signal to eventual churn. Also, the original vs. repeat telecast viewers, or late payers will need to be identified to send relevant reminders to increase engagement as a part of retention. Machine learning algorithm will also help classify the at-risk viewers of niche programs to send retention offers.
Personalisation: By carefully mining the viewing behaviour of the viewers, the marketer can send personalised offers, be it recommending the VOD action movie by spotting affinity towards action movies or recommending a GEC serial or another channel matching the viewership pattern. Also, it would be pretty useful for the new channel and new program launches to find relevant viewers that can be recommended to the broadcasters.
Advertising: For the marketer, advertising and revenue management brings a plethora of use cases to deal with. Right from the program and channel performance analytics to assessing the potential of floating an AFP (Advertiser Funded Program) with the advertiser for the niche target segment (e.g. 35-45 years old, working female for an FMCG product). It also provides an opportunity to look in to the niche programs with lesser but loyal HVC (high value customer) viewership to set the premium. Forecasting of demand and optimisation of revenue become the key areas of analytics here.
Packaged analytics: enabler for telcos to maximise value from IPTV
Business use cases falling under each of the above objectives associate with different behavioural segments that demand the need for targeting conditions that can be fed in to the analytics engine, where different analytics techniques need to be applied – Prescriptive, Predictive, Descriptive, Exploratory and Heuristic analytics. Flytxt analytics engine in the NEON platform empowers the telcos to apply these techniques using packaged analytics.
In the next articles, we will have a closer look at these techniques to see how relevant they become to solve the business problems belonging to aforementioned objectives that help telco monetise on the overall Entertainment Quotient of the viewers.