Churn Remains a Challenge for VMVPDs, Likely to Persist, Parks Panel Told
As virtual MVPDs continue to poach customers from traditional pay TV, the need to address one of their most appealing differentiators -- no-contract subscriptions -- continues to challenge the segment, said Parks Associates analyst Paul Erickson at the company’s virtual…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Future of Video conference last week. “There’s a higher level of churn than in traditional pay-TV services,” a factor that’s “likely to persist,” said Erickson, asking panelists what strategies vMVPDs could adopt to stem customer defections. Nic Wilson, TiVo head-customer success, said one possibility is to bundle over-the-top subscriptions like T-Mobile’s subscriber retention tack: “Find those services so that if they cancel your service, they’re not just canceling video." Erickson said the user experience is important to reduce subscriber churn, whether it’s superior content aggregation or a smarter, more personalized experience where relevant content is surfaced to subscribers. That can help retain customers in an environment where “people are bombarded by choice.” Michael Ribero, ViacomCBS’ Paramount+ vice president-global marketing, said an vMVPD service has “got to work like regular TV.” To ask someone from the traditional pay-TV world to come over to a vMVPD service means there can be no change in quality of service from pay TV, “which worked 99.9% of the time,” Ribero said. “I can’t say that always happens in the virtual world.” Customers particularly aren’t forgiving of a subpar sports experience, Ribero said. “If you have any sort of buffering or any sort of lapse, there’s no amount of customer service, there’s no amount of rebate -- people hate you and they want to leave.” The vMVPD experience should replicate the immediacy of over-the-air and MVPD TV viewing: “Being able to turn on [the TV], and something is just on,” Ribero said, would counter OTT viewers’ increasing “discovery fatigue.” It’s also important to let customers know that a vMVPD service is a complement to Netflix and Hulu, not a competitor, as consumers try to make sense of the myriad content options, he said. Ribero said it may be time for the industry to change the way it measures churn to reflect the different needs of the OTT model. A football fan who returns to a football package season after season doesn’t fit an old churn measurement model, he said: “Is that a win or not?” The ability to do “subscription management” based on channels within a bundle would give vMVPDs a “value-add” over other services, said Greg Riker, head-business development and sales, Americas, for Comcast's Metrological. An AI-based algorithm that understands subscribers' viewing interests could serve suggestions to swap channels for one more closely aligned with their interests. That would be a way to drive value for the service, he said.