While SVOD revenues boom, pay-per-view slumbers and electronic sales lag. What’s one of the biggest advantage for SVOD? Great content discovery and recommendations. It’s time for transactional VOD to catch up.
According DEG, for the year ending Q2 2015 pay-per-view (PPV) and U.S. electronic sales were worth $2B and $1.5B respectively. Unfortunately, signs are that both could be underperforming the market. Between Q2 2013 and Q2 2014 physical disk sales tumbled $800M while digital sales only increased $400M. Even worse, PPV actually declined slightly over the same period. SVOD spending increased $820M in the same period.
For pay TV operators, the challenge could be as simple as people just can’t find what they’re looking for. According to Digitalsmiths, 71% say they get frustrated because they can’t find something for the family to watch. Nearly half of pay TV customers don’t use search, saying it takes too long (20%) and is just too difficult to find (18%.) This is risky ground for operators, as if a consumer switches to a different device to find what they’re looking for the operators losses the opportunity to participate in subsequent TVOD activity.
In this webinar, we discuss the challenges facing the transactional VOD industry and real industry solutions that can help improve performance.
Todd Viegut, CEO of Kannuu, says that advanced search and recommendations can make a big improvement in the performance of operator VOD systems. He discusses how Kannuu was able to help Telstra boost user engagement in search and discovery over 8 times and increase overall VOD revenue 4%. As Mr. Viegut puts it, “properly implemented search, properly implemented recommendations do have a significant impact.”
Iddo Shai, Director of Product Marketing – Video and OTT at Kaltura, says that one of the primary reason Netflix has such low churn, versus Hulu and Amazon, is because: “Netflix is really a leader in how they recommend content to their users…these are tools that Kaltura and Kannuu can provide.”
One of the key components of any search or recommendation system is extensive information about the shows and movies available through the service. “It all starts with good clean metadata,” says Mr. Viegut. This data has to be centralized and properly indexed for fast access and accurate results.
Mr. Shai discusses a solution that combines show metadata with social media to create a personalized picture of the best things to watch right now. The social media component is able to identify shows a user might like based on what friends are watching. It is also able to provide a list of programs that a lot of people of watching right now, the so-called “buzz-meter”. This approach had a tremendous impact on Yes, an Israeli pay TV operator. Mr. Shai described how 66% of recommendations were clicked on by users and this resulted in a 22% lift in VOD orders.
Why it matters
Transactional VOD is underperforming versus subscription VOD.
One of the reasons is the lack of availability of advanced search and recommendations with pay TV operators.
When you add these features operators see an immediate benefit.