The survey found that over half of respondents get their pay TV from cable, while price and discounts are the primary drivers of satisfaction and switching providers. While interest in advanced applications is growing, price remains the most important factor for both retaining and attracting subscribers. Providers have difficulty differentiating themselves, so price may be the only way for new providers like telcos to gain market share.

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Questions…
Questions
Adi Kishore
Senior Analyst
Heavy Reading
www.heavyreading.com

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. 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. 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