Home Analysis Telcos are best placed to become the multi-subscription management hub and super-bundler

Telcos are best placed to become the multi-subscription management hub and super-bundler

The global subscription economy is set to grow by 81% in the next three years, according to Juniper Research, and consumers are already suggesting they would welcome the availability of a single platform that manages all their subscriptions. There are compelling arguments that telcos are in the best position to capitalise on this new opportunity, as the subscription hub and super-bundler. Verizon and Optus have already made this a distinct feature of their consumer offer. This concept can help both telcos and subscription service providers improve customer value. However, there could be competition from other verticals.

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Telcos are in pole position to lead the market for super-bundling of subscription services that span everything from SVOD and D2C studio streamers to exercise and wellbeing apps and even advanced car technology that charges a monthly fee – like heated seats or hands-free motorway driving. Bango, the company helping to create a seamless marketplace for subscription services that can be bundled and billed by broadband and mobile providers, believes that telcos can win in this market partly because they have an established relationship with consumers but also because of their extensive household reach.

Anil Malhotra, Co-founder of Bango, declares: “If you aggregate all the world’s telcos together, they reach something like 4-5 billion people, so if you think of that as a single platform it has more reach than anything else on earth. And they have a built-in billing relationship with those 4-5 billion people – a way to collect money on a monthly, recurring bill, in most cases.

“Align that with what subscription service providers want, which is a facility to monetise their service easily – a distribution mechanism that helps them acquire customers and also retain them.” Malhotra believes the evidence will show that when a streaming service is available as a managed and/or bundled subscription via a telco it helps retention and drives lifetime customer value for both parties.

Telcos understand the opportunity in front of them to become the hub where consumers pick and manage their growing pile of subscription-based services. “There is a high level of commitment among telcos to become a super-bundler and subscriptions hub,” Malhotra comments. “The interest is high because this hits all the KPIs they are interested in, like ARPU, retention and lifetime customer value.”

Bango is at the heart of this new opportunity with a SaaS-based solution that combines technical integration (including provisioning and entitlement management) with merchandising, data-driven marketing and even, where wanted, standardised commercial ‘handshakes’ (between subscription provider and telcos). All of this is designed to make the subscription hub and super-bundling opportunity easy to pursue for both parties, with endless one-to-one ‘merchant-to-reseller’ integrations avoided.

Last year, Bango partnered with Juniper Research to investigate the global subscriptions economy, with the analyst firm authoring a white paper called ‘How telcos must capitalize on the Super Bundling opportunity’. Juniper Research forecast that the global subscription economy will grow by 81% in the next three years to reach a value of $599 billion in 2026, buoyed by homes taking more services. In the UK, for example, each adult is forecast to take 5.2 subscription services by that year (up from 2.6 in 2018).

Two telcos that are leading the charge in the subscription hub market are Verizon in the USA and Optus in Australia. Verizon already onboarded leading streaming services like Disney+, Hulu, ESPN+, Discovery and AMC+ but these have now been moved into the company’s +play platform “that allows users to discover, purchase and manage some of their favourite subscriptions across entertainment, audio, gaming, fitness, music, lifestyle and more – all in one place.”

Verizon +play

+play has prompted an expansion of service offers, with new additions like Netflix, Peloton, Veep’s concert livestreams, WW International, A+E Networks, The Athletic, Calm Vix+ (from TelevisaUnivision) and even Duolingo. When announcing this innovation last year, Manon Brouillette, EVP and CEO at Verizon Consumer Group, said that “+play is a natural extension of our core strengths” and that it would scale choice through aggregation.

Optus, meanwhile, offers SubHub, where it tells consumers that they can easily manage their subscriptions by bringing them together in one place. “You’ll enjoy the ease of making just one simple payment each month, and it can help you make some big savings, too!” Partners (with subscription services available) range from Hayu, BritBox, Binge and Netflix to Kindle Unlimited, Microsoft 365 and Masterclass (which offers multi-topic skills classes ranging from leadership to photography and acting).

Optus SubHub

In both cases, there is no charge to the consumer for using these subscription hubs. This has all the hallmarks of a classic win-win-win. Both these telcos are Bango customers.

There is potential competition for telcos. Malhotra offers examples of the types of companies that could set themselves up as subscription management hubs, perhaps with their own specialisations. The first are from banking/finance. “This industry might take the angle that they consolidate your subscriptions to help you save money.” He points out that a ‘Premier’ banking service (designed for high net-worth clients) would be a suitable candidate for offering high-end car buyers subscriptions for their car tech.

He also believes employee benefit programme providers are interested in this concept, given that they already aggregate offers like health care, pension contributions and prize draws. “Increasingly, employee benefits are managed online, so they would have a similar operational exercise. These companies could decide to standardise the way they aggregate services and throw in new subscription services that are discounted.”

Retailers are on his list, but Malhotra reckons telcos will know more than companies in other verticals about our consumption habits, as one additional advantage. In a simple example, he says a high-performance broadband package could suggest a propensity to games and so an interest in game subscriptions or bundles.

The Bango solution avoids what would otherwise be costly integrations for the merchant (the subscription service provider) and the reseller (the telco). It manages the environment where consumers find, choose and manage subscriptions. It is described as a ready-made, plug-in, one-stop solution, and Bango likens it to a digital vending machine that can be stocked with the very latest subscription services and deals.

Key features of the technology include easy onboarding of multiple partners, rapid deployment, and a seamless customer experience.

The solution handles multiple billing arrangements like ‘charge to bill’, ‘card on file’ or ‘wallet’. It supports the ability to pick and choose services (a la carte rather than all-or-nothing bundles) and it delivers a single and real-time view across all customers, products, subscriptions, offers, entitlements and payments, among other things. Insights are provided for performance analysis.

Merchants can provide standardised business terms to Bango, which are then adopted by all telcos that plug into the system, or they can choose to arrange these individually. Bango makes its money with SaaS fees and a fee based on a small percentage charge for the value of a subscription that is taken.

As usual, good marketing will help drive success. Where requested, Bango can help by harnessing its whole-market knowledge of what services work together in bundles, which kinds of consumers are most likely to take different services, and what impact promotions can have, like discounts or free trials, for different ‘apps’.

The three top categories of subscription currently (in 2023), according to the research by Juniper Research, are digital video, digital music and physical goods boxes (like food and recipe boxes or regular hygiene products). Malhotra says the subscription services market is both broadening and deepening, using wellness (meditation and relaxation), education, language learning and religious content as examples of special interest services.

He refers to a Bango subscriber survey from 2022 that found that 78% of subscribers want a single platform to manage all their subscriptions. He thinks there is a clear opportunity for those telcos willing to provide that platform. And of course, none of the services above include smart home subscriptions that could accompany new applications ranging from cybersecurity to remote door locks. Malhotra agrees that the Smart Home could expand the subscription services market further.

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