The battle for the hearts of pay-TV subscribers is in full swing. In almost every region, the number of subscription-based pay-TV services across cable, satellite and recently via OTT delivery has increased tenfold in the last decade. Amid this competitive landscape, characterised by shorter duration contracts, high rates of churn are forcing operators to dramatically rethink their approach to subscriber management.
In March 2016, Paywizard commissioned research experts Decipher to conduct nine focus groups in the UK and US to explore consumer attitudes to subscription video on-demand (SVoD) services and what factors affect their propensity to churn or stay loyal. Among the learnings that surfaced were two standout findings. Firstly, consumers see SVoD services as entertainment to dip in and out of, and desire the ability to easily leave and come back when the time suits. Secondly, and consequently, customer service and experience are emerging as new and powerful differentiators between pay-TV services, since this superior treatment and level of support is vital for tempting back subscribers and keeping them loyal.
Since high rates of churn are forcing operators to significantly increase the volume of new subscribers to generate a longer term and stable subscriber community, providing a great customer experience from the early moments is critical for operators. Across both geographies, the research unearthed a number of key factors which influence consumers’ decisions to sign up, many of which are necessitated by a proactive, transparent and flexible approach to customer service.
Pay-OTT excites the eyes and the wallet
There was a high level of general interest in pay-OTT as a new, exciting way of viewing content. For many, however, SVoD in particular was part of a desire to find a cheaper option to bundled content packaging from pay-TV providers. It was clear that word of mouth about a particular programme such as House of Cards and Breaking Bad often drove the user to investigate the service and join. However, it was equally striking that the overall consumer experience was important in selecting and staying with services.
Offers and deals are a necessity
Many of the groups had received enticement from an online offer; Amazon was mentioned frequently for offering deals to join its Prime service. A trial period was perceived as a vital component, as it allows the user to experience the content range first hand. It was felt to remove the barriers to entry by a significant margin, and many respondents commented that they would not have joined their service had a trial not been available.
New subscribers value on-boarding assistance
Many commented that SVoD services could do more in their initial engagement efforts to acquaint new subscribers with the service. As one recent ‘package changer’ commented: “I had no help when I initially subscribed to Netflix, but then I found out that the US version takes you through a whole orientation and helps you refine your interests for the recommendations. That’s a great starting point”.
Honesty and transparency
Prospective joiners valued honesty and transparency, right from their initial investigation of a service. Prospective joiners expressed concern for one SVoD service’s sport pricing being phrased as ‘from £6.99’, and were more trusting of packaging options that contained clarity on pricing impact. People expected simple pricing tiers, with a clear account of what each option gives you. Flat rate pricing, with no prospect of hidden charges, was mentioned often.
Signup should be simple
Joiners expected registration to take only ‘a couple of minutes’, and shouldn’t require excessive information to be entered. Payment options should include credit card, direct debit and online services such as Paypal.
Flexibility
Services were praised for having monthly non-contract billing. Flexibility without contract ‘lock-in’ was seen as reassuring, with Netflix seen as a good example. Amazon Prime raised some concern for requiring an upfront year-long payment. Some questioned this, as it raised doubts about the ease of cancelling.
Accessibility
There was an expectation for the service to be highly accessible and supportive of a variety of hardware. The TV was seen as an important device for support, with the majority of respondents having a TV-enabled SVoD setup. As one subscriber mentioned, “I tend to watch Sky in the front room on the big TV and Netflix in bed on my tablet.”
The research highlights how customer service and experience can help define the difference between a struggling challenger and a flourishing TV service provider. Consumers are hailing efforts from providers like Netflix, which is enhancing its support services to build trust from the word go.
Looking at great brands beyond the TV world like Apple, Virgin, Tencent, and Google, the key unifying factor is that they attempt to understand their customers and respond in a way that works within the constraints of their respective markets. This ethos is fundamental for operators who want to create and maintain loyalty from their audience.
By Bhavesh Vaghela, chief marketing officer at Paywizard
