Cord Cutters and Nevers Part Two: The Rise of the Cord Cutters

In part one of this two part blog on Cord Cutters and Cord Nevers, I spent a week without using my PayTV service, instead using OTT services to sate my need for programming to see just how feasible an option it is.

You can read the whole article here, but in summary, I suggest that the arguments for cutting PayTV are getting stronger all the time and in the UK at least, one could could attempt it quite successfully. But there are still many things hindering cutting ties to PayTV - for example exclusives that you can only get on channels such as Sky Atlantic (Boardwalk Empire and Game of Thrones) and the convenience that comes from all your TV in one spot, as opposed to multiple apps/services.

In the beginning of the last blog, I led with the following statistic. 18-34 year old's are 77% more likely to become cord nevers and 67% more likely to become cord cutter households [Source]. Of course, it could be quite easy to dismiss stats that say people 'might' cut the cord, people might do a lot of things but the fact is that they are, in ever larger numbers. 

ComScore data published in October 2014 revealed that 24% of 18- to 24-year-olds do not have a traditional pay TV service. Of these people, 13% previously had pay TV service but later cut the cord while 11% have never subscribed to a pay TV service at all. 

In the UK, it's possible to see a possible result of this shift as a report states that, last year, the number of TV households actually fell and by as much as 300,000 as people move to phones, tablets and laptops/computers.

And to see this cord cutting/shaving in action, Reddit (a huge social networking and news website where community members can all submit content on endless topics) there is a cordcutters sub community (subreddit), with 72 thousand unique subscribers, who all share advice, tips and help on how to cut the cord and get cheap/free streaming services legally. They have a dozen related subreddits many again with tens of thousands of subscribers. 

As well as many people who cord cut because of costs, the views of this reddit user are also extremely common;

"For me, it was a combination of things... a lack of interest in a lot of what is on cable TV, combined with a desire for more flexibility in where and how I watch TV. More and more, I watch "TV" on devices other than my television. I watch on my iPad around the house while doing projects or chores, or I watch on my computer while browsing the web, etc."

The problem for this person, is that operators are not keeping up with the changes in how consumers are viewing television - operators need to start getting creative with how they offer TV.

Like a kid in a candy store

Choice, flexibility and price are the three key points, and they're all very much interlinked with each other. 

First and foremost it is likely that going forward operators are increasingly going to need to have some form of OTT offering and a robust means of providing live and catchup TV to subscribers through DVRs, mobile devices and laptops - The SkyGo app is an example of this. 

This is not only a means of dealing with cord cutters by addressing their concerns and providing a solution, but as a service differentiator or perhaps even to keep up date with other service providers. 

AT&T seem to have hit the nail on the head in addressing those three points by providing a service directly to those who want to "cut the cord"

"A $39-per-month bundle [with] 45 Mbps Internet and subscriptions to Amazon Prime and HBO. It's an acknowledgement that subscribers are smart enough to figure out the rest on their own. There aren't any sports channels, cooking shows or 24-hour news stations, and a phone service is completely separate, but these deals are designed for the Game-of-Thrones generation"

It's about empowering the consumer and recognising that there are dramatic changes in the way people are engaging with TV content which is not going to change back. Without these sorts of packages and offers you're making a consumer who is on the fence, choose between having your service or not. And ultimately a consumer who chooses 'not' to take your service brings in no money! 

A provider, like AT&T, with packages that provide the flexibility, choice and prices that customers want, are less likely to see people cutting the cord. 

I believe the industry could make great efforts in eliminating the notion of cord cutters and cord nevers, but they'll have to accept the idea of a cord shaver who is perhaps more money conscious, who is viewing content different but ultimately still wants some, but not all, of the services. 

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

Driving the Efficiency Agenda

Efficiency is often considered an internal issue for a CSP. Streamlining processes and minimising the steps to achieve a specific goal; creating efficiency to not only deliver a good service to customers, but also decrease operational costs.

Yet, the part that is often overlooked is evaluating efficiency from the customers’ point of view. Can they communicate and complete the tasks they want to do using the channel of their choice? Can they use multiple channels for the same task? Are the processes within each channel quick and easy-to-use?

In order for the customer to have that efficient experience, the channels have to address the needs demanded by the customer. All this requires an ‘outside in’ understanding. Without this insight, resources can be ploughed into systems that are ultimately not delivering the support demanded by the customers.

The channels desired may well differ from type of customer, or in fact each individual customer. Segmenting the audience to address the core demands is essential. A CSP cannot meet the requirements of all customers. Segmenting allows CSPs to address core concerns of high-value customers, or more loyal ones.

But whatever segment the CSP targets, understanding the customer is crucial. Analysing customer data is important, but further research needs to be done to establish what channels and processes customers want to do, which is not currently possible. This insight can then be applied when mapping out the support systems.

To deliver the ultimate efficient organisation, efficiency must be achieved on the inside, as well as for those using CSPs services. Start with the customers, then work backwards to understand how the vision can be achieved through efficient internal solutions. For the ultimate customer experience – ensure efficiency throughout.

This blog was written by Natasha Geldard, Marketing Consultant for CoralTree.

The Complexity of Simplicity

Why is simplicity so complex?

Less is certainly more when it comes to the IT BSS environment. Eight systems doing the job which one can do. Or even, a ten-step process to solve a customer enquiry, when it could be done in five – lowering the call handling time. Simplifying processes is an obvious win for CSPs. So, why aren't more CSPs simplifying their BSS?

I attended a TM Forum webinar last week in which, Rob Rich, TM Forum’s MD of Insight Research, talked about customer centricity. We heard all about the fundamental steps required for a CSP to drive profitability from having a more customer-centric business.

The majority of the content is not new, as Rob mentioned he has focused on it for many years. And it is fairly obvious. But TM Forum has packaged all the research together into an easy-to-understand format, which aligns to their best practice model for CSPs.

Putting Simplicity First

Rob put simplicity at the heart of achieving a customer-centric business. Simplicity that allows CSPs to increase the customer experience and agility of the business, at the same time decreases operational costs.

So why is simplicity not more readily adopted? Many say it is because they are stuck with back-end legacy systems, which are difficult to cut the ties to. Some claim it is too expensive to move to a new system, so instead invest in further systems to help alleviate some of the short-term pains.

This can work and can help mask many issues. But in order to achieve true ‘customer centricity’ simplicity is crucial. Cutting back systems to a solution that can manage customer interactions, across all channels, has to be the obvious choice. Only then, can CSPs be truly efficient, with simplified processes that benefit both the business and the customer.

This simplicity should not be so complex to achieve, especially as the benefits to the business vastly outweigh the investment. Simplicity – what a great vision.

This blog was written by Natasha Geldard, Marketing Consultant for CoralTree.

Seamless Service Activation

Enhance customer experience with robust provisioning

A customer makes the decision to sign up for a new service; the customer then expects the service to be available. They pay; they receive the service. It seems a clear concept, yet it does not always happen so simply. Operators are still having problems with service activation and this impacts customer experience.

In this digital era, with any service a customer purchases, it is considered to be unacceptable to pay for a service then experience a delay in receiving it. Or it not being authorised when you know the payment card being used is valid and in credit. Or perhaps even the system goes down…’we are not able to process your request at this time’. These are all frustrations for the customer.

This does two things. Annoys the customer, blemishing the company image. And deters them from buying the service, which means missed revenue. Repeat occurrences could have long-term impact on the subscriber base, as some move to competitors for a better service.

Activation of services in a timely and efficient manner for customers is essential for any operator providing subscription-based TV. 

So what are the essentials when looking for a provisioning solution?

1. High performance - you need to be assured that whether your solution is being utilised for hundreds, thousands, or millions of subscribers, it does the job regardless of numbers.
2. Content protection - a small percentage of the consumer market prefer to avoid paying for TV content. Securing authorised access to content is critical to protect revenues and ensure continuity of service to paying customers.
3. Interoperability - working alongside existing systems to ensure seamless, fast and reliable delivery of services.

Delivery of services does not only build revenues for operators, it can ensure a customer stays loyal. The experience is just as critical at this stage as when customers first signed up. Ensuring activation of services is streamlined with a robust and powerful service activation solution will help operators build customer satisfaction.

This blog was written by Natasha Geldard, Marketing, CoralTree