Broadband Communities

Show Guide 2018

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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106 BROADBAND COMMUNITIES SUMMIT 2018 Show Guide Sponsor WHITE PAPER Broadcasters, cable networks, pay-TV and content providers, and advertisers all need to adapt their services, especially as the newest generation of viewers takes over a larger role in the viewing audience. Consumer spending will follow the viewing habits to which consumers are accustomed. More than one-half of TV viewers still occasionally watch live TV broadcasts, but the shift away from linear channel viewing is increasing, particularly among younger consumers. LOW SATISFACTION WITH PAY-T V SERVICES Many factors are helping drive the penetration decline in the North American pay-TV market, and the increase in available OTT services is just one. Consumers report steady increases in monthly fees for their pay TV alongside declines in their satisfaction. These factors impact consumers' willingness to recommend video services to others. • The average NPS (net promoter score) for pay-TV providers is –20. By comparison, Netflix's NPS (the highest-rated OTT service) was 44 in 3Q 2017. • The NPS's of online pay-TV services are much higher than those of traditional pay-TV providers. In 3Q 2017, PlayStation Vue had an NPS of 47, and Sling TV had an NPS of 25. This combination of factors is pushing consumers away from traditional pay TV in favor of easily accessible, lower cost options. Operator strategies to counter subscriber loss could include promotional options, including free or subsidized CPE (customer premises equipment). Cord cutters and cord shavers indicate these types of offers could entice them to keep their services. CONSUMERS AND PRIVACY CONCERNS Consumers are normalizing their OTT behaviors, and one truth emerging from their new habits is that no service can be one-size- fits-all anymore. Services will extend to multiple screens and offer new levels of personalization and user interaction. Business models emerging from this environment, such as targeted advertising, are potentially lucrative but create new challenges in consumer confidence because the majority of consumers are concerned about the safety and privacy issues these practices create. • 52 percent of U.S. pay-TV subscribers are concerned that advertisers might use their personal data. • 46 percent of pay-TV subscribers worry about the safety and use of their personal data when they use online video services. • 43 percent of pay-TV subscribers worry that their providers might not keep their data safe. On April 3, 2017, the U.S. government signed a joint resolution allowing ISPs to sell collected consumer data without requiring opt-in consent from consumers. The FCC also voted to suspend rules regulating consumer privacy data. Both efforts generated considerable attention in the mainstream media, and consumer concerns will grow. For many industry players, access to this granular consumer data is critical to the success of their online marketing, advertising, and business strategies. For example, Google allows advertisers to target YouTube ads based solely on a consumer's search history. Brands are able to push video ads to viewers who recently searched for a retail product, a specific movie trailer or information about a television show. Other companies, such as Safegraph, use the location tracking data from certain apps on smartphones to collect location data for millions of consumers. v Brett Sappington is senior director of research for Parks Associates, an internationally recognized market research and consulting company specializing in emerging consumer technology products and services. Hunter Sappington is a researcher at Parks Associates studying trends and innovation in connected consumer electronics. "Privacy fears are a major factor in broadband consumers' online media experiences. If they feel like an internet or video service is taking advantage of them in terms of how their data is being collected and used, then negative perceptions about the service will quickly spread. Providers need to not only preemptively tell consumers what data is being collected and why but also the ways in which that data collection benefits them in terms of features and recommendations. Service providers must walk a fine line to collect enough data to be useful to advertisers and consumers while not collecting so much that it is seen as overly intrusive." – Hunter Sappington, Research Analyst .

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