Making TV Pay: The Telco Challenge

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The Heavy Ready Pay TV Survey

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Making TV Pay: The Telco Challenge

  1. 1. 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
  2. 2. 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
  3. 3. 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?
  4. 4. 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
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. 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
  14. 14. 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
  15. 15. 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
  16. 16. Questions… Questions Adi Kishore Senior Analyst Heavy Reading www.heavyreading.com
  17. 17. The Heavy Reading Pay TV Survey November 2008 N b Thank You. Adi Kishore Senior Analyst Heavy Reading y g www.heavyreading.com
  18. 18. 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
  19. 19. 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

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