CoralTree's roundup of 2014

So in good order and good end of year tradition, we felt it worthwhile to recap some of this year's blog articles and see if they correlate with what the key goings on are in the industry.

Customer Experience

We started off the year with a blog on Customer Experience, at the time it proved to be very popular and it remains one of our most read blog articles. This is probably because in this environment of reduced ARPUs, general financial instability, and diverging customer habits getting the upper hand on the competition has been driven, in no small way, by improving Customer Experience.

Maybe that includes getting rid of customer bills?... it might sound controversial, but one operator is already doing it. This is something that we covered in a blog post ingeniously titled "Customers don't really want bills".

Even with things starting to pan out for many operators, as the European economy strengthens, superior customer experience has definitely become something that consumers expect of operators and driving the efficiency agenda can play a part in that as well. Talking of efficiency... 

Operational Efficiencies 

Other ways that operators have sought to improve their bottom line and increase their profits is through operational efficiencies. The OSS side of things has had a lot of focus in recent months with all the talk - and hype? - surrounding 'NFV' (Network Functions Virtualisation).

But BSS efficiencies have been talked about in a variety of flavours and incantations. We covered such topics in "Do we understand the meaning of convergence?" and "Expectations that have sped ahead: efficiency is crucial". 

These topics appear to have dropped off the radar a little bit in the wake of all the NFV talk. However, the OSS/BSS bottleneck that currently prevents some operators maximising efficiencies in NFV, could see BSS efficiencies and even new BSS implementations (make sure you know why they sometimes fail!) being put in place to enable the full benefits of Network Functions Virtualisation integration.

Hopefully this means the topic will get a whole new lease of life!

Viewing Habits

Consumer changes in viewing habits have also come to the fore this year. From the extremes of customers ditching pay-tv services altogether, which have been becoming more of an issue for CSPs, as companies like Netflix become more prevalent. We've started covering this in part one of the "cord cutters/cord nevers" series. To customers general viewing habits changing a topic we looked at in "What’s next? Interactive multi-tasking!"

In a strange twist, North Korea has show just how much viewing habits have changed and how much ready consumers are for change.

With major US cinema chains pulling Sony's new film 'The Interview', but high public demand to view it, Sony called on On-Demand providers YouTube, Google Play, Microsoft Video and more recently iTunes to host the video for a nationwide release which earned them $18m. As much as they had aimed to earn via a national cinema release, so is this the end of the cinema?

We'll be looking at this ever more important topic in the new year.

What can we expect from the coming year? 

Well, all these topics have been high profile topics throughout 2014, but the industry is still far from implementing these features fully. So we should expect to see more of them over the coming year(s)! 

But there are a great many other things that might well present themselves in 2015, such as an increased focus on BSS systems that are able to provide flexible, personalised offerings to customers. Or an increase in telecoms companies adopting more non-traditional services, which are predicted to grow from 8-10% of income, to a potential 15-20% of revenue. This could help sure up bottom lines that are constantly under threat.

What ever the new year brings, Happy New Year, and all the best in 2015! 

Cord Cutters and Nevers Part One: Could I be a Cord Cutter?

In a recent study carried out by Comscore: 18-34 year old's are 77% more likely to become cord nevers and 67% more likely to become cord cutter households. These should be 'sit up and take notice' figures for CSP's as this age group has already caused much of the change we've seen in viewing habits of late (multi device, second screen etc)

So in an effort get an idea on what it would be like moving from 'more likely' to actually 'cutting the cord' on linear TV or indeed why someone might decide to never pick up a subscription TV service in the first place, I decided to delve into the world of cord cutters and cord nevers by giving up TV for a week.

I guess I fall a little shy of an average 'linear' TV user, I do watch it and with some frequency, but I also have access to two leading OTT providers (you can probably guess the names) and access to the VOD offering from that well known UK satellite provider. All of which I use to supplement my linear viewing habits - by all measures I guess I'm well equipped to start this experiment.

Diving In

Not really knowing how this would pan out, I started off the week in a flummox and almost falling at the first hurdle - we usually put BBC Breakfast on in the morning... well that's not going to happen. Radio 4 it is then! 

In the evening I continued to watch a series on one of the OTTs that I'm currently in the middle of, whilst playing some computer games. My wife was out anyway, and Masterchef wasn't until Tuesday. Nice and easy - so ends Monday.

We had to wait until Wednesday to watch Tuesday's Masterchef because of my experiment, which a little frustrating, but ultimately no real hassle. Instead we proceeded to watch some other shows on 4oD (Channel 4's On Demand/Catch Up service) and caught up on some shows we'd neglected on one of the OTT services. We put it on the main TV through the xbox. At this point I'm thinking that the experiment is going pretty well really!

Mid week rolls around and we're a day behind in some of our viewing. So over the next couple of days we watched the things we missed via BBC's iplayer (which has seen enormous growth recently) or the other TV catch up services ITV player and 4oD again. We also binge watched some episodes from a couple of TV series such as American Horror Story and House M.D. via one of our OTT platforms - this time we watched it on the tablet.

Friday and the weekend - well, these followed the same routine as the rest of the week with the radio on in the morning, but we did start to find ourselves struggling a bit, particularly on the Sunday morning as we didn't really have anything we could just put on as 'background' television. 

It made me realise how often we'd put the TV on even if just for background noise - a bit of Friends or something we've watched a hundred times already - whilst we got on with other things. 

Sunday evening rolled around and the experiment was over, and I was starting to consider the pros and cons of the experiment.

Conclusion.

It was an odd week, and it was actually harder than I had anticipated. 

There's a wealth of TV and films available on catch up TV and OTT services, more than enough to ensure you didn't need to put the TV on. But, and there is a but, there are a couple of things that get in the way.

It didn't quite sit well with what, I guess, are my current viewing habits - It turns out that I'm very much a second screen kind of viewer and when I'm watching something on an OTT service I feel as if I've gone out of my way to watch it and so should give it my full attention. This might be little tricky if it was my only source of TV long term!

Secondly, it's all very fragmented. I do not believe cord cutting is possible with just one VOD or OTT service, which means that one must subscribe to several. You must find a device or SmartTV that gives easy access to them all (Chromecast, for example, doesn't natively support Amazon Prime Instant) which adds a certain amount of hassle. Having multiple services also decreases the cost advantage gained through scrapping a PayTV subscription.

In the UK, however, we have access to ‘Freeview’. It has a one off cost, access to all the terrestrial channels and a large number of additional channels as well as the option to use a DVR. 

If this was topped up with some monthly subscriptions to the Over The Top services like Blinkbox, Netflix and Amazon, It would make a compelling argument to ‘cut the cord’ on PayTV services altogether… though i'd maybe off on the scissors until all the seasons of Game of Thrones have been aired. 



In part two I'll be looking why people are cutting the cord, what the numbers are like at the moment, and what CSPs might need to do to change this trend.

Customer's don't really want bills...

Well, of course, customer's don't want bills - who really wants a bill? But this blog isn't about customers who would rather get free services, this is about whether customers want to receive bills or if they're just happy to pay each month.

Over on Billing Views as part of an ETIS community gathering in Budapest, one service provider said that their customers didn't really want bills. 

Taken aback by the comment he was then asked to clarify the statement. 
He responded with;

"Absolutely, of course consumers do not want bills anymore. It is too much trouble. What they want is to look at their bank statement. If the amount is about what they expected, they are happy. If it is different they want to pick up the phone."

This got me thinking... when was the last time that I actually, properly, looked at a bill? I receive both electronic bills and 'traditional' paper bills. But I don't ever read them. The paper bills go in a pile awaiting the inevitable, but often delayed, shredding and the electronic bills (an email telling me to check the bill portal on their website) usually gets opened and ignored. 

Why don't I check my bills? because I check my bank account, I have an account for my bills. I know what I put in each month and I know how much my respeqctive payments cost me each month. Just as the operators said, if there's something wrong - the amount isn't right - i'll check it out and if necessary pick up the phone.. but 9 times out of 10 i'm not interested. 

So how did they come to this realisation? 

A fluke apparently. Customers (for the most part) were notified that their bills were ready to view via text message and email. Typically bill related calls to the company's call centres are quite high, one day the text messages didn't fire to let customers know that their bill was ready and the number of calls about bills dropped dramatically "the percentage of calls about billing was virtually zero" - someone from Customer Relations brought the drop in calls to someones attention and they found out that the texts didn't trigger. 

"Customers only think about the bill when they are told about the bill. Very very few call us to say they haven't received a bill" 

With how easy it is to manage and track your banking and billing via online and mobile banking nowadays it's easy to see how this is the case. So should companies stop sending bills? What about the 'retail space' that comes with bills? the chance for cross-sells and up-sells? Irrelevant apparently. 

"A bill will always have a negative impact" It's a reminder that there's more money leaving your account. Bills are never nice, apart from that one I had from my energy supplier that said I'd saved up quite a bit of credit and they were dropping my monthly charge as a result - but how often does that happen?

As we move further and further into the digital, it's very rare now to find a customer who doesn't have an email account - typically an older customer - so who needs to spend time crafting the space on a bill to sell something to a customer who is disinclined to view the bill in the first place. Send them an email instead it has less negativity attached to it, and there's more space for the offers and incentives. 

Are there problems with this? 

Sure, some people don't check their bank accounts routinely or regularly, so there's a risk that a problem will build up over time resulting in a very negative experience for the customer, but I would hazard a guess that if they don't check their bank account regularly then they're not likely to check their bills either and the situation is likely to occur either way. 

What about customers' whose bill vary month on month? (fixed line and mobile, i'm looking at you) well, there could be a variable limit before a bill is triggered. Maybe 5% or £5 off the baseline monthly charge amount will trigger a bill to inform them of a deviation from their normal monthly charge.

By and large however, I'm seeing benefits - Bill related calls to the call centre virtually zero? A reduction in calls means less money spent on call centres. A reduction in the number of physical bill and text message prompts sent out means less money spent (and it's greener) and informing a customer of when they're bill is abnormal instead of reminding them of their charges each month looks proactive and procustomer - which is never a bad thing. 

An interesting proposal, with some merit by the looks of it. Will it become the norm? hopefully. 


Written by Craig Maxwell-Brown Business Development Associate at CoralTree Systems