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Making TV Pay: The Telco Challenge
 

Making TV Pay: The Telco Challenge

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The Heavy Ready Pay TV Survey

The Heavy Ready Pay TV Survey

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    Making TV Pay: The Telco Challenge Making TV Pay: The Telco Challenge Presentation Transcript

    • Making TV Pay: The Telco Challenge The H Th Heavy Reading Pay TV Survey R di P S November 2008 Adi Kishore Senior Analyst Heavy Reading y g www.heavyreading.com
    • Survey Overview • Online Survey • Conducted in October-November 2008 • 193 respondents, queried on their pay TV services, their attitudes towards those services and the type of companies that provide them • Bases ranged from 99 to 193 for each question
    • Survey Focus • How should Telcos be marketing and positioning their Pay TV services for maximum take up? take-up? • How satisfied are existing subscribers? • What are the key drivers of satisfaction • What could cause existing customers to churn? • What would attract new subscribers from competitors? • What features/applications/offers are most likely to resound with consumers • How price sensitive are consumers in this economic environment?
    • Telcos are in the unfortunate position of needing to pull away subscribers from cable and satellite operators Current Pay TV Provider Cable 56.8% Satellite 29.7% Telco 10.8% Other 2.7% 0% 10% 20% 30% 40% 50% 60% n=185
    • Churn could be slowing, perhaps due to multiplay bundles Tenure with current provider Less than 1 yr 15.2% 1-3 yrs 30.4% 3-5 yrs 14.1% More than 5 Years 40.2% 0% 10% 20% 30% 40% 50% n=184
    • 60+ percent of respondents get multiple services from their TV provider, but the remaining 40% are a significant opportunity Additional Services From TV Provider 100.00% 80.00% 60.00% 57.8% 38.8% 40.00% 33.50% 20.00% 7.6% 0.00% Phone Internet Wireless None of above n=185
    • Unfortunately, the primary driver for a bundle is price Reasons For Selecting One Provider For Multiple Services 100.00% 80.00% 62.83% 60.00% 40.00% 23.9% 20.00% 13.3% 13 3% 0.00% Cost Single Bill g Best Provider n=113
    • Price is also the only area where customer satisfaction is relatively low Current Providers Rating on Listed Criteria Excellent Good 75.0% 60.0% 45.0% 30.0% 15.0% 15 0% 11% 0.0% Price Programming Dependability Customer Care Advanced HDTV Applications Note: Advanced applications included VOD, DVR, Online gaming, premium packages n=183, 184
    • Customers are not really looking to switch providers – a bad sign for those that need to gain new subscribers Likely To Switch Providers 100.0% 80.0% 60.0% 45.4% 46.5% 40.0% 20.0% 8.1% 0.0% Very Likely y y Somewhat Likely y Not Likely y n=185
    • Prior churn was driven by a number of factors Reasons For Leaving Last Provider Cost 29.9% Service quality 30.7% 30 7% Programming Choices 23.6% Moved 29.1% Other 17.32% 0% 5% 10% 15% 20% 25% 30% 35% n=127
    • And there are various requirements stated for a new provider. But except for price, satisfaction levels are quite high for these criteria Importance Of Listed Criteria In Selecting A Provider Very Important Important 100.0% 75.0% % 50.0% 25.0% 0.0% Price Programming Dependability Customer Care Advanced HDTV Applications Note: Advanced applications included VOD, DVR, Online gaming, premium packages n=183-185
    • But when it comes down to actually picking the pay TV provider, discounts drove the majority Reason For Picking Current Provider Discount 52.0% Friend Recommendation 12.6% Saw Advertisement 15.0% Other 20.47% 0% 10% 20% 30% 40% 50% 60% n=127
    • And it’s again single-mindedly price that would make them switch today Reason For Switching From Current Provider Price 59.6% Programming Choices 11.1% 11 1% Dependability 15.2% Customer Care 4.0% Advanced Features 4.04% 0% 10% 20% 30% 40% 50% 60% 70% n=99
    • Providers aren’t being able to significantly differentiate themselves, so price might be the only differentiator Kind of Provider I Would Choose If I Switched Don't Know/Not Sure 42.4% Other 1 0% 1.0% Satellite 21.2% Telco 13.1% Cable 22.22% 0% 10% 20% 30% 40% 50% n=183
    • Summary and Conclusions • Price, discounts more critical than ever for subscriber acquisition • Very pronounced emphasis on price, quite probably a result of current economic situation i it ti • Churn appears to be slowing with long tenures and fairly high satisfaction • Bundling likely primary cause of this trend • Makes it harder for Telcos to gain subscribers • Emerging applications valued but not being seen as subscription drivers • After price, dependability/service quality is most important • Not much commitment to any particular provider type • Undecideds are the largest segment with majority open to a deal of some kind
    • Questions… Questions Adi Kishore Senior Analyst Heavy Reading www.heavyreading.com
    • The Heavy Reading Pay TV Survey November 2008 N b Thank You. Adi Kishore Senior Analyst Heavy Reading y g www.heavyreading.com
    • Interest in advanced features Very Interested Somewhat Interested 100.0% 75.0% 50.0% 25.0% 0.0% VOD DVR Gaming Premium ITV HDTV packages n=178-181
    • Previous Provider Never used anyone else 30.1% 30 1% Satellite 14.2% 14 2% Telco 2.2% 2 2% Cable 53.55% 0% 10% 20% 30% 40% 50% 60% n=183