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HomeArticlesMeet the Television Tribes: getting to know today’s pay-TV consumers
Monday, 12 November 2018 11:30

Meet the Television Tribes: getting to know today’s pay-TV consumers

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With growth proving challenging in the pay-TV sector, operators need to be embracingnew strategies to both retain and attract customers. In the APAC region pay-TV operators should be looking to defend existing revenues while tapping into continued consumer demand for easy access to  streamed video content with the right strategy.

 As a first step, it is imperative that operators fully understand the different types of audiences they are addressing and their specific content needs, and then look to meeting them with a compelling mix of content and user experience – all of which needs to be underpinned by the right technology. Operators who think that catering to a generalised notion of what millennials or other generations want is key to understanding the consumer could be missing out in a world that is much more complex.

Research by NAGRA and analyst firm Ampere Analysis has identified five distinct pay-TV consumer segments, or “tribes”, that operators should be factoring into their planning, these are: 

a) Content Connoisseurs (24 percent of TV consumers surveyed), 

b) Broadcast Bingers (23 percent), 

c) Digitally Detached (18 percent), 

d) TV Traditionalists (18 percent) and 

e) Super Spenders (17 percent). of these the consumer segments that will deliver the most value are Content Connoisseurs and TV Traditionalists. and as such should be a key focus for future strategic plans

The first, Content Connoisseurs, are the most demanding in terms of the content they want and how they view it. Generally speaking, they are young, wealthy, love TV and movies… and they like pay-TV, but like SVoD even more. Everything about the way they engage with content favours the new over the old. Crucially, Content Connoisseurs are by far the biggest spenders, spending nearly $70 a month on their services.

 The second audience segment, and one that is often overlooked, is TV Traditionalists who are typically middle-aged, middle-income, and watch ‘traditional TV’ mostly on their main screen. They are willing to pay, particularly for the pay-TV tent poles of movies and sport, meaning high monthly spends of just under $60 with their main provider. Most importantly for operators, TV Traditionalists are less likely to switch providers with just nine percent doing so in the last six months, according to “Two Tribes” research report, which is less than a third of the rate of Content Connoisseurs. 

Pay-TV operators need therefore to factor in these two customer types as part of their future planning. Meeting their services’ needs means developing strategies that spans content, technology and operations to deliver a compelling and seamless user experience. This user experience should intersect with both traditional and modern user journeys, providing a frictionless path between linear and VOD content. In this regard, pay-TV operators can also guard against revenue vanishing “over the top” by embracing SVoD providers (e.g. Netflix) and integrating them into their pay-TV bundle. Similarly, content must be delivered to consumers not just at the right time, but also on the right device.

 With strong network connectivity being an essential building block in managing the increasing uptake of digital technology, there is a need for telcos to expand existing infrastructure, and invest in improving their network capacity, speed and latency to match the expectations of today’s data-driven world. Star Hub for instance was able to deliver the next generation of IP-enabled pay-TV services to its customers by transitioning to an IP infrastructure, as well as ensuring consistency in content delivery. Operators also should be looking to adopt an integrated approach to content protection across devices using advanced anti-piracy measures and watermarking, which has the added value of simplifying operations as well as protecting their most valuable content. In a world where piracy is a given, protecting content over both broadcast and IP networks and stopping illegal distribution over the internet is the bedrock of any content strategy. 

Also important at a time where the tactics employed by pirates continue to evolve is that operators acknowledge that consumer demand is shifting in favour of high quality viewing experiences and their services need to match and exceed what pirated services can offer. The sector must also forge closer partnerships within the ecosystem and work together to communicate the benefits of a high-quality pay-TV service. Illegal content accessed with Kodi add-ons, for example can appear to many consumers as legitimate SVoD offerings and represent a lost opportunity to pay-TV operators; Ampere’s research shows that Content Connoisseurs are most likely to access pirated content, so meeting this tribe’s needs with high-quality legitimate services is an essential defence. 

 In addition there is a real need for operators to ensure that the service they are providing are consistent, quality-focussed, experiences on all platforms, including customers’ own devices–licensing and securing premium content for distribution in all forms needs to be part of the overall approach. 

While pay-TV growth may be slowing in mature markets, it’s not necessary to hit the panic button just yet – there are still plenty of strategies operators can implement to defend revenues and ensure growth. Acknowledging the differing needs of emerging TV Tribes is a first step, and building this into future plans needs to be coupled with enforcing a unified approach to protecting content and clamping down on piracy. By enabling subscribers to build their own bespoke TV bundles of live, catch-up and OTT streams, pay-TV providers can ensure access to a wide range of content in the format and on the device that their customers are looking for, therefore reducing the inclination to churn.

Top-line findings of the “TV Tribes”research underscore that there is no one-size-fits-all strategy for pay-TV operators looking to maximise the value of their customer base. Identifying and then meeting the needs of distinct consumer segments through tailored approaches will though be the key to attracting and retaining subscribers and growing revenue.

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