According to scheduling data from Grace note, a leading provider of music and video content and technologies to many of the top video service providers, in an average week, a traditional pay-TV provider has over 26,000 pieces of content available on linear TV, over 450 sporting events (a vast majority are live), as well as awards shows and concerts. News shows are also one of the biggest contributors to these numbers. Additionally, pay-TV providers can feature the availability of 13,515 pieces of free VOD content (10,290 are episodic, and 3,225 are movies), 1,551 pieces of PVOD content (including pay-per-view events), and 11,964 free TV offerings (primarily episodic). Of the paid TV offerings, the median price is US$5.99, and the average price is US$7.51. In comparison, Netflix has roughly 4,000 movies, 35,000 episodes from 950 TV series, and 500 stand-alone programs.
What is interesting to observe is that pay-TV service delivers significantly greater amounts of choices to the viewer, yet continues to lose ground to Netflix. Leveraging personalised recommendations, paired with the larger-than-Netflix content library, pay-TV providers need to utilise their data to promote unseen, but relevant content to its subscriber base. Once pay-TV providers appreciate the importance of the data, much of which is unavailable to Netflix, it is important to then understand how to utilise this data to increase subscriber viewing and engagement. While pay-TV providers have made strides to get away from the EPG grid in their TV everywhere offerings, the grid remains. However, as a result of outside factors such as gaming devices, iTunes service, other music services, etc., consumers are becoming accustomed to more personalised navigation schemes. On these services, content grouped by consumers’ interests, genres, or other logical categories is now typically delivered in carousels or collections.
The grid, on the other hand, has no real logical order in its placement of broadcast networks, thereby making the linear navigation experience frustrating for the subscriber. When the carousel concept was introduced years ago by services such as iTunes, most carousels had to be manually created by an editorial team, and every user saw the same content. Today, these services are leveraging data to power algorithms and machine learning, thereby enabling carousels to be dynamic and personalised. With this approach, a pay-TV provider can create an infi nite number of carousels. Now, the content fi nds the viewer. Pay-TV providers could leverage on their wealth of data to take this carousel feature a step further — by introducing predictions of what subscribers will want to watch next. Netfl ix currently offers recommendations for what its subscribers may want to watch. However, because pay-TV providers have a magnitude of fresh episodic series, catch-up TV, and fi rst-run content, plus the power of viewer behavioural data, pay-TV providers’ content predictions can ensure its subscribers do not miss tonight’s Dancing with the Stars show, a favourite sporting event, or that latest Modern Family episode. The following is a list of other popular carousels that pay-TV providers can offer that Netfl ix cannot, as well as best practices on how to leverage carousels:
While many of the more popular TV shows have older seasons on Netfl ix, only the pay-TV provider currently has all the recent episodes, and in many cases the ability to offer older episodes on-demand. While Netfl ix is developing original content, its current business model of an average of US$11 a month per subscriber could never support acquiring the additional content that the pay-TV provider has licensed.
Sports content is a competitive advantage for pay-TV providers over Netflix as well as most OTT offerings available today. While pay-TV providers have sports programming, providers are limiting the potential of this major competitive advantage over OTT offerings by not leveraging the wealth of data on subscribers’ viewing habits of this content: favourite teams, favourite sporting events, etc.
A major competitive advantage for pay-TV providers is that they have more Live content available for subscribers than any other service. However, pay-TV providers need to utilise subscribers’ viewing history and habits, social data, and scheduling data, for the purpose of powering recommendations or carousels to ensure that the right audience knows about the Live content that would interest them. For example, a Presidential debate that is scheduled to air that week, or upcoming awards show that will air that night or even a talk show that might interest a subset of the provider’s subscriber base.
Pay-TV providers typically receive new releases of movies earlier than Netfl ix. Again, based on viewership data, pay-TV providers have the ability to increase ARPU through tailored promotions, at the right time, to its subscribers matching the appropriate demographics. For example, if a pay-TV provider knows that there are many households who watch a considerable amount of TV series and spend more time viewing this content than the average household, the provider should promote the movie to this subset of subscribers.
PPV events tend to draw interest from unique categories, such as Boxing, Mixed Martial Arts (MMA), and Professional Wrestling. Since certain TV shows are very specific to these types of PPV events (e.g., The Ultimate Fighter, Monday Night Raw), by leveraging its viewership data, a pay-TV provider can easily promote specific PPV events to the subscribers who have watched TV shows on a related topic.
Rather than sending direct mail or promoting content through the grid, which do not differentiate among demographic groups, pay- TV providers may be better served by leveraging data such as viewing history to promote packages that the subscriber does not currently have. For example, if a subscriber watches a considerable amount of college basketball, pay-TV providers should promote its college basketball premium packages or regional sports offerings.
The Power of Personalisation
Once the pay-TV provider better understands its subscribers’ viewing habits (e.g., through machine learning), then the provider can create carousels that are based on the subscribers’ interests.
While the average time spent watching television has dropped 4% in the last three years, the average viewing on Netfl ix has grown 17% over that same period. This does not take into consideration other competitive video options such as Hulu, YouTube, and other streaming services. Pay-TV providers need to create integrated marketing programs that better distinguish their offerings from those of Netfl ix. The fi ght for eyeballs is stronger now than ever, and pay- TV providers can take lessons from Netfl ix — but Digitalsmiths strongly believes the students can become the teachers. In addition, unlike the case with Netflix’s content, pay-TV providers can take advantage of the interactive features of its programming. For instance, viewers can cast votes on awards shows or reality/contest shows (e.g., Dancing with the Stars, American Idol, etc.), and can send tweets or Facebook updates of what they are watching while the show is airing and relevant. This functionality provides another competitive advantage for pay-TV providers and can lead to more engaged viewers.