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Content and price vs. customer service and experience – the new breed of TV differentiators

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In this guest post from Andrew Burke, Chairman of Paywizard, he presents data showing how tough it is to get consumers to find and then join an SVOD service. He also has concrete suggestions on smoothing the process.


Andrew Burke - Paywizard

Andrew Burke, Paywizard

Since the birth of subscription video on demand (SVOD) services, content and cost have held great influence over consumers’ motivations to sign up. The attraction of extensive entertainment libraries, exclusive shows and original content have proven to be powerful reasons for joining – with Netflix ruling the roost in the US, followed by Amazon Video and Hulu. US consumers show great willingness to pay for their entertainment, however the greater choice of SVOD services in the US means that consumers have become more comfortable interchanging them, sizing them up against each other and scrutinizing costs more than ever.

This ‘dip in and out’ approach is impacting operators many-fold. It means that operators must continue to deliver the best content at the best price, while competing with other SVOD services and competitors with strengths in other areas, like live TV and sports. However, in an apparent backlash against the era of monopolistic cable subscriptions, US consumers are now evaluating SVOD services based on a wider set of criteria, placing new emphasis on customer service as a fundamental part of the SVOD package.

This was recently discovered by research experts Decipher, who were commissioned by Paywizard to examine what consumers desire from an SVOD service, through a series of US and UK focus groups. When looking solely at the early stages of the subscriber journey –discovering a service and signing up – the responses of subscribers were revealing. Globally, Decipher found that word of mouth about a particular program such as House of Cards often drove people to sign up, and that low cost services were favored. Yet what was also universal across all groups was the necessity of providing offers to entice people in, followed by a trial period where the user could experience the content range first hand. Similarly, many expressed a desire for easy access to support, with US users showing a greater interest in customer helplines for example, likely due to the prominence of helplines for other services.

Another finding was that prospective joiners valued honesty and transparency, right from their initial investigation of a service. Flat rate pricing, with no hidden charges, was mentioned often, as well as desire for simple pricing tiers, with a clear account of package options. Non-contract billing was also perceived as a strong draw, while flexibility without contract ‘lock-in’ was seen as reassuring. As such, Amazon Prime’s year-long package raised some doubts, with participants expressing concerns about cancelling and how easily they could get refunds if they ended their subscription. Amazon have since announced a monthly subscription model, introducing the flexibility many consumers highlighted as a vital aspect of their preferred service.

Following a decision to join, the smoothness of registration also impacts customers’ perceptions of a service. Joiners expect registration to take only “a couple of minutes” and without the need to input excessive information. A variety of payment methods should also be supported, including credit card, direct debit and services such as PayPal, which removes the need to enter payment information altogether. Once a subscriber joins, the clock is ticking for operators, who only have 3 months from sign up to create a loyal customer, so ensuring customers feel valued during that period is vital.

Greater flexibility was perceived as a strong reason to sign up; while on the other end of the spectrum a simple and instant cancellation process left a feeling of goodwill, which was vital for the prospect of a future return. One respondent explained;

“I cancelled Amazon Prime, and they gave me a full refund. It was so easy that I went back. If it had been a nightmare, I wouldn’t have returned”.

These new findings hold great potential for TV service providers who are willing to invest in understanding their key demographics and seek new ways to attract their target subscribers. Considerations such as proactive customer service, flexibility over contracts and packages and clear, honest communication about the service offering are showing great potential as a way to combat the staggeringly high 6% quarterly churn rates which are characteristic of today’s OTT markets.

This is just a snapshot of ways in which operators can improve the customer experience during the moments that they Find and Join an SVOD service. The challenge for providers is getting the infrastructure in place to roll out these personalized interactions, and preserving subscriber data so that it can be harnessed when needed, and at scale. Acquiring and retaining customers whilst combating churn is about more than that, and can be summed up in the words of one focus group member:

if you feel appreciated by a service you’re more likely to stay”.

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