In an age where US TV consumers enjoy an excess of viewing options, video providers are finding themselves looking for new solutions that will help them keep their customers engaged. For the consumers themselves, it used to be a pretty simple choice: cable or satellite TV. Today, video providers offer primary TV packages, TV Everywhere options, and now skinny bundles as well. In addition, consumers can also choose from Netflix and Prime Video and then there’s Hulu and Sony Vu; the list goes on and on. The latest count by Parks Associates shows that the US consumer now has over 200 OTT services from which to choose, so it’s getting pretty crowded out there.
Meeting consumer expectations
The abundance of OTT services means consumers not only have more options but are also less loyal; they try out new services, they don’t hesitate to cancel, and they move around a lot. Indeed, a third of US broadband homes subscribe to multiple OTT services. And if pay TV churn rates were considered high at 20 percent annually, then how are video providers going to deal with OTT services churn rates that exceeds 50 percent?
Given this crowded marketplace, turning casual viewers into loyal fans of your content and service is the main challenge. After all there is little point making all this effort to go direct-to-consumer if you can’t convert this audience base.
Riding the big data wave
As one industry expert said to me the other day, TV as an industry is still in the dark ages when it comes to the adoption of data as a basic driver for business outcomes. In the connected world of cloud TV where every click is registered, few have managed to connect the data dots to make them meaningful and actionable. Of course, there are the Internet giants for whom data has been at the very core of their business model – Google, FB, and Amazon – who are also changing the future of TV.
Companies that wish to compete with these Internet giants on who owns the consumer experience, will have to learn how to leverage data better to make their video services standout. Of course, having data is not enough; you need to know how to handle it properly. Big data technology is evolving at a fast pace, and to leverage it video service providers need a new paradigm to help them use it to their advantage to turn viewers in a crowded marketplace into fans.
Targeted TV: turning data into business outcomes
Video’s move to IP introduced personalization into the TV experience for the first time. While it seems trivial now, two important things have happened that made this possible: first, video has become available on any device, and second, the customer’s experience has become interactive, allowing the viewer to watch content anywhere and get some personalized recommendations.
The byproduct of this shift is the creation of data and lots of it. So, the key question, therefore, isn’t how can I get the data, and it’s not even how I process it – there are enough tools and technologies around to do that – the question is: what’s the process by which I can use this data to get my desired business outcomes? I propose a framework for doing exactly that: Targeted TV.
Targeted TV should be that new way of thinking about how we leverage data to meet our cloud TV service business goals:
- Gather the data on your users from all available sources.
- Understand more about your users, by creating your own customer data model based on multi-dimensional segments
- Act on the data; make your cloud TV platform understand those profiles at every level.
If you want to stand out, having a single rail of behavioral-based personalized VOD recommendations in your application simply isn’t going to cut it By gathering usage, user, settings and external data, one could start understanding the user base; build a customer model that defines segments such as: high spenders, drama enthusiasts, premium device owners and even more complex segments like potential churners. When the initial model is set, video providers can start acting on this data: create target audiences for offering more tailored promotions, experiences in the app and of course, content and advertising targeting.
It’s a noisy OTT world out there and you need to consider how you can stand out, offering consumers a unique user journey that will convert them from viewers into fans. Just remember, that there are a whole lot of other operators out there who are trying to do the same thing, so you’ll need to find the offering and technology partner that makes you stand out of the crowd.