Single-Hub for Content: Why App Stores are a Model for Cable Providers
Like many consumers, I review my card statements monthly to make sure everything is on track. Last month, I couldn’t help but notice the sheer number of content services I’m subscribed to. From Spotify to HBO Now, from Netflix to Hulu to Showtime, you name it, I’m probably subscribed to it (on top of my cable package). That’s a lot of recurring payments to stay on top of every month, not to mention the fact that as a consumer of content, it’s a bit of a disjointed experience, shifting from one app to another or trying to remember which movie or TV show is available where.
And this isn’t just me: viewers are increasingly streaming content on numerous devices and paying for it at unprecedented rates, from more than one provider. But with this shift in behavior comes a parallel shift in expectations: with a growing number of subscriptions to manage, consumers are increasingly craving a universal hub for all of their content.
This trend goes beyond headlines or personal anecdotes; data backs it up as well. Last year, CSG conducted a survey on the growth of streaming services and their impact on Pay-TV providers. One of the key findings was that consumers want one place to search all of their video content. More specifically, we found that more than 80% of streamers subscribe to at least one premium video service, and half of these subscribe to more than one. Tellingly, our survey also revealed that 46% of streamers greatly value “feature” bundles to manage all their subscriptions—and the numbers were even higher for the key demographic of connected millennials.
Adopting an app store mentality
So how can providers respond?
Operators need to start thinking about their platforms more in line with how Google and Apple think about their app stores.
Think about it – when you buy an app from your phone, where do you go? You generally don’t go to the app maker itself, but to the integrated iOS or Android app store. Access to the device is managed by the OS provider. If Apple only offered its own apps in its store then it would be a less valuable experience.
I see a clear parallel to the cable and OTT worlds here: operators should evolve their platforms with this model in mind. Providers would still own the delivery platform to the television for the vast majority of consumers, but they would need to start thinking about becoming a service delivery mechanism for not just their own services, but for new partner services.
Operators would get a cut of each service that is extended, similar to the app model used by Apple. This could even expand beyond video and content, to include new IoT and connected home services as well. Whatever it includes, this shift will necessitate a new approach in order to create an integrated experience, centered on a single hub model. Netflix’s partnership with Comcast’s X1 boxes is a great example of how the market is heading in this direction.
Benefits to both consumers and operators
Providers should aim to create a service delivery ecosystem rich with useful features. Consolidated billing and payment across subscription services reduce numerous charges into a single invoice. Integrated search, voice commands, on-demand menus and recommendation features across all subscriptions further enhance the user experience, delivering custom-tailored and easily accessible content all in one location.
But there are benefits for providers as well. Those same features drive viewership, stickiness and data that can be mined for insights. Offers such as bundled discounts across multiple services can drive increased adoption of incremental services, driving customer loyalty and reducing churn
Making it happen: partnering to deliver the single-hub experience
Ultimately, cable operators and streaming providers will need to work together to figure out how to create a one-stop-shop for content. In order to compete in today’s digital economy, service providers will need to delight customers by forging partnerships and constructing a consolidated subscriber portal for search, content management and billing across each personalized bundle of video content.
In the future, these kinds of partnerships will have to take place on a much larger scale if providers are to satisfy the consumer’s need for a single-hub. This will entail a complex web of partners that need to be managed carefully, from both a strategic and a back-office perspective. Operators will need to ensure that they can not only onboard and deliver with these new partners, but settle based on consumption by the end-consumer with flexible rating models that make the delivery platform compelling. To create a single-hub experience that appeals to tomorrow’s consumers, providers will need to undertake significant steps to integrate the offerings of others into both the front and back end of the customer experience.
In order to build a user experience on par with the most popular competitors, providers should prioritize developing enhanced features such as integrated recommendations and search, not only for a single service, but across as many distinct services through partnerships wherever possible.
This preference for a universal content hub will soon turn into an expectation—will your offering be ready?