No industry is an island, not when it’s a $2.1 trillion dollar industry like the global entertainment and media industry. Multichannel video programming distributors (MVPDs) work with a host of professionals within an eco-system of content creators, content distributors, advertising agencies and the end viewer.
The amount of human effort expended to get programming, advertising that supports it and to attract the relevant eyeballs on air is surprising in this era of ever-increasing automation. In 2021, an anticipated 6 million U.S. households will cut the cord, and this is an addition to the 25 million that have already cut the cord since over-the-top (OTT) streaming and other innovative and disruptive options have hit the marketplace. Still, when it comes to the nuts and bolts of running multichannel operations, the processes that keep things functioning smoothly are often astonishingly outdated and cumbersome. Why aren’t more broadcast companies automating their workflows?
It’s Not Like They Don’t Know What’s Coming Next
MVPD executives are well aware that digital and, along with it, automation through artificial intelligence (AI), machine learning (ML) and other advances are changing their industry.
Technologists adding their voices to the chorus is now helpful. These participants can add value by addressing the central concern of cable company executives.
They privately feel they don’t know enough about digital, AI, and ML. Beyond that, it is essential. They feel stretched too thin to select from the plethora of options and execute upon it. Without a confident working understanding of what they should be doing, they are looking for a way to vet partners who can help them but are concerned they don’t have enough tools for that either
Knowing that digital transformation and corresponding changes are crucial and significant is only intimidating because of the scope of what an executive thinks they need to do, only makes a lack of confidence in knowing where to start worse.
Leveraging excellent service and execution, a company may take the big challenge of digital transformation and break it down into easy to do elements, building the customer’s confidence and proficiency along the way. In this way, the company becomes a provider of the tools needed and a trusted authority and partner who shows how to make this innovation achievable.
The cable enterprise’s goal is to acquire better systems and software than they could develop in-house by finding a trusted partner that can quickly adapt to their needs, stay ahead of technology, and improve processes.
They are looking for a company they can trust to continuously enhance their system and be responsive to them and trends. Executives also need to understand the news and trends in their industry. Without the perceived free time to stay on top of the news, they’re counting on their partner to stay ahead of trends and technology.
Focus on Customer Retention
For multichannel providers, growing a business means, first of all, retaining existing customers. Yet, with the advent of video streaming services like Hulu, Netflix and Prime Video, cable companies have been losing customers with the pace of cord cutting expected to continue at and take pay TV households down 46.6 million by 2024. That’s a 43% loss in 4 years. To accommodate the explosive demand for streaming services, cable providers must make their services convenient and available to a public that often watches their favorite programs on phones or laptops.
Younger generations, including Gen Z and millennials, tend to choose options which are unbundled, have no commitment and are optically cheaper on their wallets. They are also often saving on streaming services through illicit means like sharing passwords. However, they get access to services, these groups spend a lot of time streaming. One study found that 7 out of 10 teenagers (members of Generation Z) watch more than three hours of mobile video a day, but only 33 percent watch cable TV. Other research found that millennials spend an average of 1.5 hours a day watching TV online and on streaming services.
How can MVPDs keep up? They might compete with or even partner with streaming services if they prioritize customer experience, with an eye towards retention. Innovative use of newer technologies and automation via cloud-based services can help keep more customers satisfied for longer.
A PwC study found that a clunky and unwieldy interface is one of the biggest grievances that drives consumers away from MVPD services—especially top cord-cutters like millennials. More intuitive user interfaces (UIs) offered by streaming services like Netflix and Hulu could go a long way towards promoting customer retention. Not only are these UIs much better to view and use, but they offer conveniences like being able to organize programs for each viewer in the family.
Customer engagement must become the top priority; engagement solves for the retention issue. When MVPDs begin to combine aesthetically pleasing UIs with capabilities, make searching for the relevant content easier and have stronger recommendation engines that’s when more of the intended target audience will take notice. Historically MVPD’s became a force by bundling linear and broadcast TV over a set-top box, a dish or via a cable. Eventually, the endless OTT options from the mainstream services Netflix, Amazon’s Prime Video and Hulu to the niche services like ClarityStream and Hotstar need to be bundled so the viewer has a single content library to choose from. People pay for simplicity and convenience. Additionally, MVPDs could consider partnering with technology and consumer electronics makers themselves to ease interoperability issues that stymie viewership.