EMERGING MARKET TELCO CHANGES ITS APPROACH TO OTT MONETIZATION BASED ON IEMR's ADVICE
Our client – part of a global telco group in an emerging market – was seeing increasing pressure on its IPTV offering. Our client was seeing a growing population of "cord nevers" who got their entertainment fix from over-the-top (OTT) video players such as Netflix.
To put the client's issue in context, the market for OTT content distribution services in their market rose by over 250% between 2014 and 2017, while the client's paid TV subscribers increased by only 0.9% during the same period.
IEMR's Global Consumer Telecommunications Survey figures also showed that over 50% of our clients' customers wanted to access multiple types of content from their TV sets; and wanted to get access to this content anywhere, anytime, and on any device. Our figures also showed that pricing was an important issue for our client's customers. . . they did not want to pay extra for OTT content that our client would provide, but would happily pay an extra monthly subscription to an OTT provider for the same content!
We undertook a comprehensive survey and focus groups of our client's customer base to understand the key features and functionality required by customers who clearly wanted OTT options and the prices they were willing to pay for different types of services including TV Everywhere, Subscriptions, Pay-Per-View content, and Ad-based Monetization.
Based on this approach and our knowledge of how CSPs in other parts of the world have dealt with the OTT threat, we advised our client to take a two-stage strategic approach to fencing off the OTT challenge they faced. First, provide a TV Everywhere option to its customers, where our client's existing content is deliverd to its existing customers on multiple devices, including mobile and tablet options.
Second, based on our evidence, we recommended our client sign partnership agreements with leading OTT content vendors to provide add-on subscriptions to its customer base for their OTT content and that this content be delivered on our client's TV Everywhere App.
While our client's strategy teams were thinking of various options to counter their OTT challengers, IEMR's evidence-based approach provided validation to their thinking in some aspects and challenged other ideas they had. As a result of our evidence, our client dropped ad-based monetization and pay-per-view content monetization options and focussed their efforts on our recommended TV Everywhere and Add-on Subscription options.
As a result of excellent technology and marketing execution by our client, and in part because of IEMR's recommendations, since 2016, the client has seen a 9.1% increase in its Paid TV subscription business, with most new subscribers stated reason for signing up being IEMR's recommended TV Everywhere and Add-on Subscription OTT options.