With the Netflix’ of the world extensively using data science to drive engagement and revenues by improving the relevance of their content catalogues, as well as the performance of the user experience, it is clear that cable companies need to make use of similar technologies and tools to stay competitive.
Arguably, pay-TV providers are only now realising what players in other sectors, such as banking and retail, have learned the hard way – that in a highly saturated market consumers expect operators to know them and be able to cater to their circumstances, preferences and needs in real time.
A recent Paywizard survey found that 84% of customers said they would cancel a pay-TV service as a result of poor customer experience – and 24% have done so in the past year. What’s more, 46% said they retained a subscription they might otherwise have cancelled due to positive customer experience.
“Providers that do not address subscriber demands for more personalised, relevant and timely experiences by tapping into data-fuelled customer insight will see high churn rates and defections to more CRM-savvy services,” says Paywizard chief marketing officer Bhavesh Vaghela.
“Operators offering on-demand video services, for instance, need to be able to identify when a subscriber is nearly finished the series they’ve been watching religiously and offer some spot-on recommendations for new content"
Paywizard chief marketing officer Bhavesh Vaghela
“Operators offering on-demand video services, for instance, need to be able to identify when a subscriber is nearly finished the series they’ve been watching religiously and offer some spot-on recommendations for new content – and maybe a deal for some content they previously did not have access to – to keep the customer on board.”
A focus group research run by Paywizard last year showed that subscribers have a very negative view of telcos and operators primarily offering broadband, “which spilled over to their perceptions of these companies’ as pay-TV providers,” suggests Vaghela. In contrast, the feedback on OTT services was that “they are much more on-the-ball and far more responsive when it comes to customer experience”.
In Germany, for instance, Amazon Prime Instant Video has emerged as the market leader with 46% of consumers surveyed taking the service compared to 41% subscribing to runner-up Sky Deutschland. Similarly, in the UK, OTT players such as Netflix, Amazon Prime and, more recently, Now TV are hugely outpacing more traditional multi-service operators in terms of subscriber growth.
“Cable and satellite providers need to raise their game when it comes to interaction with subscribers,” says Vaghela. “OTT providers are using all the tools at their disposal to gain insight into their customers and make sure they make each interaction – from subscription uptake to service disruption queries to content recommendations – produces a positive customer experience. Broadband and cable providers need to emulate this data-driven, subscriber-focused approach if they hope to stem churn and firm up customer loyalty.”
Cable companies have used spreadsheets and business intelligence (BI) products for years, looking at ways to improve operational efficiency, reduce churn and optimise revenues. Through recent investments in DOCSIS and server virtualisation, MSOs have been evolving their technology stacks to become more IP-centric when it comes to delivering subscriber services.
The game-changing factor, according to Nagra senior product marketing manager Simon Trudelle, is the possibility to leverage a broad set of real-time data sources, including non-structured data from multiple systems and applications, and combine these with libraries of smart data analytics algorithms.
“This allows data scientists and managers to quickly identify key data correlations, tune algorithms on the spot, and turn these data insights into repeatable actions that deliver tangible business results over time,” he says.
Service providers use such techniques to improve STB and multiscreen app usage, understand viewer behaviour and interest for specific TV programs, drive up OTT VOD store consumption, or analyse the root causes of churn by customer segment among possible use cases.
Going a step further, industry pioneers like Altice Group’s Cablevision in the US or Sky in Europe have used data techniques, coupled with a smart ad engine, to deliver more targeted TV advertising and increase ad revenues.
“It is clear that a fully connected, two-way TV platform is the foundation to a data-driven business strategy, so there is an imperative to make sure that all TV screens, from STBs to player apps on consumer devices, run applications that collect data,” says Trudelle.
Yet leveraging big data and analytics goes beyond traditional dashboarding and data mining. It needs to use a new set of tools and technologies that can rapidly aggregate multiple real-time data sources of any format, while allowing business users to quickly identify correlations, and more importantly drive repeatable actions that fix business issues.
“Finding out that 20% of a VOD catalogue generates 80% of the consumption for a given user age group, with 30% of the assets that are never watched is helpful insight and can help reduce content acquisition costs,” says Trudelle. “On top of that, making sure that movies that are getting significant attention on social networks are then systematically promoted within the VOD service matters too, contributing to the overall business performance of the service. It’s this kind of link between data insight and day-to-day operations that is key to drive business excellence for cable broadband providers in the long run.”
Nagra’s user experience and content protection TV platform products are now ‘cloud-ready’ to deliver real-time data streams that, along with other data sources, can feed its Insight data analytics platform to empower service providers.
One secret to mining accurate data-driven customer insight, and reacting to it successfully in real time, is being able to access all the relevant information on customer behaviour patterns.
This requires operators to have solutions that don’t just capture information – such as sign-up forms, viewing data, billing records, marketing interactions and even complaints – but that they store that information in what Paywizard dubs a single customer view (SCV) database.
The lack of a unified database can be a particular problem with cable and broadband players, many of which hold phone, mobile, broadband and TV customer data in different places. A telco provider that has introduced a television offering has to be sure to bring this TV subscriber data together with that of the original parts of the business.
“This SCV data can be analysed, segmented and used to more effectively communicate, service and engage customers,” says Vaghela. “The result is a better overall customer experience and a stronger brand for the operator.”
There may, though, be a cultural inertia in cable broadband companies inhibiting best data practices. “The most successful are not afraid of what data tells them and not afraid to act,” contends ThinkAnalytics CTO and founder Peter Docherty. “It’s not about criticising the way a job is done before but thinking of a better way to reach the result.”
There are also technical restrictors. “It's not enough to have the right information – you’ve also got to be able to do something with it and that requires flexibility in the systems you’ve deployed,” says Docherty. “With somemiddleware or back-end systems it is not easy for operators to effect change. It might involve changing something in the app and then getting users to download the new app which might take weeks even to get it certified and pushed to an app store.
“Being competitive and improving engagement is not just about another data lake or another graph telling you what need to know,” he insists. “You need to be able to close that loop in minutes not months.”