Increasing the competitive edge for cable MSOs through investments in transformation
Cable MSOs are ready for fierce competition. They are making significant investments in their network infrastructure to be positioned for a high-bandwidth, mobile-integrated, multi-screen world. In this world, digital distribution is as important a line of business as traditional linear broadcast, so. MSOs are increasing investment in on-demand, next-generation broadband services as well as improved customer experience.
Cable operators need to expand their relationships with their customers and to capitalize on their growing presence in homes across the globe. There is a growing recognition among cable operators that in order to expand customer relationships, they must consider investing in true service innovation so that they can produce creative, bundled offerings that incorporate services like e-health, energy and security.
Combating Even More New Competitors
For decades, cable companies have dominated the residential scene mainly through their role as aggregators within the home. Their ability to bundle and deliver linear and on-demand content, broadband and VoIP has been enough to sustain competitiveness against telcos and satellite operators. Now, however, cable operators have to contend with over-the-top (OTT) content providers like Netflix and LOVEFiLM as well as a more recent explosion of consumer connected devices (gaming consoles, connected TVs). These devices vie with the set-top box (STB) to be the main focal point for viewers in the living room. In addition, mobile content and video delivered over the WAN, even inside the home, as well as IPTV services, threaten cable operators. For example, Verizon and AT&T have each used IPTV effectively to woo basic video subs away from cable with the promise of advanced features. At the same time, services like Aereo and devices like Roku and Boxee are disrupting traditional content delivery models even more aggressively.
The industry response to the competitive threat has been steady, starting with rolling out TV Everywhere as a way to embrace the device revolution and push out subscription video content on an anywhere, any-device basis. The MSO sector has also focused on building overlay networks to extend the value of their broadband packages with on-the-go Wi-Fi access. And, in some cases, they have begun partnering with OTT players and apps providers to create digital hybrid packages that combine traditional and next-generation services, such as a broadband bundle that comes with VUDU streaming, Pandora and a stripped-down basic cable/broadcast tier.
On the BSS/OSS front, the approach has extended mostly to the monetization of usage overage and fair usage policies for broadband.
Increasing OSS/BSS Investments to Boost Competitive Edge
While each of these is a reasonable first step, they are likely not enough to provide true differentiation within today’s fragmented, hyper-connected marketplace. The next wrinkle for cable MSOs must be to satisfy consumer preference for personalized, flexible, multi-device service packages with innovative and dynamic products that put the consumer in control of their communications and entertainment experiences; however they choose to architect them.
One of the keys to upselling and maintaining a positive customer experience is to keep things simple and easy. Thus, MSOs not only need a platform that will enable and manage the flexibility and business intelligence functions that are required to offer more personalized packages, but also need a platform that can do all these things in straightforward and intuitive ways for both consumers and MSO customer care representatives.
At the heart of such a strategy is the implementation of a converged billing and customer care solution with real-time intelligence that first and foremost can enable ‘concierge services’ for existing subscriptions. With such a platform in place, cable MSOs can offer targeted "next tier of service" promotions that can be proactively pushed to the customer in real time across any channel, based on the subscriber’s profile and network usage.
Real-time business intelligence, when combined with active mediation that manages all customer, product and usage data and ensures policy management, can enable dynamic targeting of offerings as well. For instance, an operator can identify low usage and respond automatically with a location-based promotion to help generate traffic. It also can generate cross-sell/up-sell offers that are service-aware. For example, if a subscriber is spending most of her online time watching streaming video, the operator can respond by offering a higher tier of broadband and a promotional rate on a mobile TV extension for three months.
Zero-rating is another innovation that has yet to be leveraged commercially to its full extent. In a service-aware world, a cableco can offer packages to frequent online viewers for which traffic to certain OTT sites during off-peak hours does not count against a subscriber’s data cap. Not only does this help cable MSOs manage network traffic loads, but offers a potential revenue opportunity through a partnership with the OTT provider. It also gives the customer the personalized flexibility that they crave.
MSOs also can find differentiation in providing a richer customer experience for the connected device landscape. Many of them are rolling out second-screen functionality in the form of social TV apps and the like for tablets, or are leveraging their TV Everywhere apps to encourage smartphone/tablet integration with the living room experience. But a vast opportunity lies in two largely uncharted areas: one is targeted, multiscreen advertising, across networks. The other is in a home gateway approach that allows each user within the home to create their own profiles, sets of devices, DVR queues and content stables to which they have access. Savvy MSOs can leverage such a strategy to bring previously unmanaged devices to the table, including everything from Roku boxes to gaming consoles, thus gaining visibility into the subscriber’s larger device world and applying QoE options around that home ecosystem.
All of this relies on the ability to gain a 360-degree view of the end user, apply intelligent analytics and next-generation policy, and handle complex bundles, tariffs and tailored promotions in real-time. It may sound extensive, but by transforming their operations environments into flexible, scalable, and agile engines, cable operators can create the foundation for delivering and managing compelling new revenue-generating services that will position them for the challenges of today as well as tomorrow.