MPP survey points to reducing churn as biggest opportunity for TV operators (exclusive)

Found Remote interviewed SVP of North America for MPP Scott O'Neill about the survey.

Found Remote: What are the top highlights from the research?

Scott O’Neill:

• 30% of attendees believed that the biggest challenge is acquiring OTT subscribers
• 50% of attendees believe that reducing subscriber churn is the biggest challenge
• 70% of TV operators believe that reducing churn holds the biggest opportunity

FR: What should OTT providers do to prevent churn?

SO: The first point is that they should understand why subscribers churn. There isn't just one reason; some will be voluntary, some involuntary.

By utilizing predictive technology, OTT providers can identify the subscribers at high risk of churning and prevent them actually going ahead and cancelling their subscription. We have seen accuracy levels of more than 90% and this continues to improve as we move forward.

With subscribers churning involuntary, there are various techniques OTT providers can employ to reduce this number. These include retry rules, which enable the company to set up rules for when payment attempts are to be made to garner the best chance of success. These can be applied on an individual subscription or a global basis. Suppression windows are also a powerful mechanism for increasing the chances of payment success, often financial institutions have maintenance windows, which can result in a failed payment. By implementing a suppression window, all attempts that would have fallen in that timeframe are held off until afterwards. If a payment does fail, win-back campaigns can kick in to try and win the subscriber back. These can be in the style of a request for the card details to be updated through to a marketing-led incentive offer.

FR: Who is considered a "TV operator"?

SO: TV Operators are the traditional channels and networks we all grew up watching on TV. As the industry continues to evolve, smaller, independent OTT operators can also be put in this group. Essentially, anyone with video content that they want to distribute digitally can be considered a TV Operator.

FR: Why is churn a unique issue to OTT?

SO: Churn isn’t really unique to OTT as it is also a very real issue for publishers, subscription retailers and the like. That being said, OTT operators face a lot of competition, so if the video quality is poor, a video doesn’t load properly, or a certain film isn’t available customers are unlikely to remain loyal, and will find what they are looking for elsewhere. OTT services can be major targets for churn due to the fact that they allow for experimentation, low start offers and business models that don’t lock consumers into long-term commitments thereby ensuring that they have to continuously justify the value of their service because their viewers can cancel at any given time. Certain consumers also like to swoop in to watch specific content, such as the last season of a popular show, and will then terminate the service when they’re done without penalty.

FR: What do the OTTs think about churn?

SO: Churn continues to be a sore subject for many OTT operators. For many, the main objective has been to incentivize visitors to become active users and/or paying subscribers but it is becoming clear that both time and resources should go in to figuring out how to retain their existing customers. Onboarding 5,000 new customers in a month is far less impressive when 3,000 existing users churn in that same period. With the right technology in place, we give our customers the confidence to go after new business while having the peace of mind that we are minimizing churn and payment breakage for their existing user-base through our platform. Since we launched our Retention & Recovery model in early 2016, it continues to be the primary area of interest for existing and prospective customers indicating that the war on churn is very much ongoing. While churn is a thorn in everyone’s side, smaller service providers seem to fear it more as they often only get one chance with a customer. If a customer signs up and cancels, chances are they will never see them again. Fortunately for some of the larger channels, the draw of specific highly sought after content will often have people returning, churning and repeating as they continue to seek out the best content, for the lowest prices.

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