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TV goes tribal: How operators can effectively target the most valuable consumers

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With growth stalling in many markets across the Pay TV industry, operators need new strategies to attract and retain customers, and avoid revenue-crushing price wars. And with the right plan of action, Pay TV operators can defend existing revenues while tapping into consumers’ love affair with SVoD.

To create new strategies, operators must first understand the different types of consumer and their needs, meeting them with a compelling mix of content and user experience – all underpinned by the right technology.

Many operators may think that catering to a generalised notion of what millennials or other generations want is key to understanding the consumer. But the reality is more complex.

New research by NAGRA and UK firm Ampere Analysis has identified five distinct Pay TV consumer segments, or “tribes”: Content Connoisseurs (24 per cent of consumers surveyed), Broadcast Bingers (23 per cent), Digitally Detached (18 per cent), TV Traditionalists (18 per cent) and Super Spenders (17 per cent). Which are the two most valuable consumer segments? Content Connoisseurs and TV Traditionalists. Here’s why.

Content Connoisseurs are the most demanding consumers in terms of the content they want and how they view it. Generally speaking, they are young, wealthy and love TV and movies. They like Pay TV, but like SVoD even more. Everything about the way they engage with content favours the new over the old. Crucially, Content Connoisseurs are by far the biggest spenders, spending nearly $70 a month on their services.

TV traditionalists meanwhile are easily overlooked. This group is the middle-aged, middle-income stalwart of traditional TV consumption, watching mostly on the main screen. They are willing to pay, particularly for the Pay TV tent poles of movies and sport, meaning high monthly spends of just under $60 with their main provider. Most importantly for operators, they are less likely to churn than anyone else – just nine per cent switched providers in the last six months. That’s less than a third of the churn-rate of Content Connoisseurs.

So how can Pay TV operators keep these two most valuable tribes happy?

Meeting their needs demands a response that spans content, technology and operations to deliver a compelling and seamless user experience. The user experience should intersect with traditional and modern user journeys, forming a frictionless path between linear and VOD content. In this regard, Pay TV operators can also guard against revenue vanishing “over the top” by embracing SVoD providers and integrating them into their Pay TV service. Similarly, content must be delivered to consumers not just at the right time, but also on the right device.

And it’s not just about content delivery. Operators also need to take a unified approach to protecting their content. As the threat of piracy continues to evolve, protecting content over broadcast and IP networks and preventing illegal distribution over the Internet are key to maintaining a healthy ecosystem.

Also integral to tackling the threat of piracy is acknowledging shifting consumer demand, stepping up to match and overtake the quality of experience that pirated services offer, and taking real steps to drive innovation. It also requires the industry to forge a closer partnership with the ecosystem and communicate the benefits of a high-quality Pay TV service. Illegal content accessed with Kodi add-ons, for example, can appear to many consumers as legitimate SVoD offerings and represent a lost opportunity to Pay TV operators; the research shows that Content Connoisseurs are most likely to access pirated content, so meeting this tribe’s needs with high-quality legitimate services is an essential defence.

And finally, operators must ensure a consistent, class-leading consumer experience on all platforms, including customers’ own devices. This includes licensing and securing premium content for distribution in all forms.

So while Pay TV growth is slowing in mature markets, it’s not worth hitting the panic button just yet – there are still plenty of ways operators can defend revenues and tap into growth. But first, they must acknowledge the needs of these emerging TV tribes, and continue a unified approach to protecting content and clamping down on piracy. By enabling subscribers to build their own bespoke TV bundles of live, catch-up and OTT streams, Pay-TV providers can offer access to a gamut of content in the format and on the device that their customers are looking for, therefore reducing the inclination to churn.

And with these new “TV Tribes” coming to light, it’s clear that a one-size-fits-all strategy won’t maximise value. Meeting the needs of these distinct consumer segments will be the key to attracting and retaining subscribers and growing revenue.

Find out more about the emerging TV tribes by downloading the full report.


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