Another of the panels that took place during the last Nextv Series México’s virtual edition was titled ‘How to raise ARPU and reduce churn in OTT?’. Some of the main discussion topics focused on analytics and personalization to keep customer engagement and satisfaction; new revenue streams: advertising, premium and TVOD; and challenges of linear channels aggregation
The panelists gathered by Dataxis to star in the debate were Arnault Lannuzel, VP Sales Latam & South Europe at Broadpeak; and Guillermo Sierra, Head of Television and Digital Services at HITN.
‘HITN is the only public TV broadcaster in Spanish in the US. For many years, our main service has been our TV channel, available in more than 44 million homes throughout the country’, said Sierra, and later added that ‘we created a digital area four years ago, and our effort was focused on two important ways. One was the fact of recognizing that the linear TV subscriber is looking for an alternative to consume the same content that we have on linear TV, on an on demand platform. For this reason, we created ‘HITN GO’, a platform that has an SVOD service, but is free for those who are already HITN subscribers’. In addition, the executive indicated that ‘another very important concern we had was to offer a service for children’s audiences, and there we decided that it would not be possible to launch it for free, and we created a complete SVOD, which is called ‘Edye’, and it was launched just over a year ago’.
Regarding how Broadpeak works with content providers and OTTs, Lannuzel explained that ‘Broadpeak was born 10 years ago, and we started with network operators. But, about four or five years ago, we saw that there was a great need for content providers, and we started working with them on two issues: helping them improve the quality of the end-user experience, even without having their own IP network. On the other hand, they had distribution costs, which increased with traffic. The more audience, the higher distribution costs. So Broadpeak decided to work with these content provider operators to address these two issues. We have some solutions to improve the quality of the user experience; and, on the other hand, reduce the distribution costs, even when audiences grow’.
Regarding how they manage to keep the subscribers they acquire over time and strategies to increase engagement, Sierra explained that ‘the issue of churn is a key concern for us. There is an enormous offer in the OTT and VOD market. There are a large number of offers, many of very good quality, and subscribers are constantly faced with them. Very attractive platforms continue to be launched, and we have great competition in our 2-6 year old market. We are going to start to see clearly in our market what people buy and where they migrate. We are all learning a lot from this model, and even big players are not clear on how customers behave. As an industry, we must be very creative, think about what alternatives we are going to offer our audiences. We are exploring many partnerships, to give people alternatives to stay subscribed as long as possible and reduce churn, and work together with our distributors and our operators to identify who are the customers who are unsubscribing and try to invite them to come back’.
The HITN executive also assured that ‘there is something very important that is going to be implemented more and more in the industry, which is data monitoring of what the user is consuming, so that they do not suddenly cancel their subscriptions. There, we must work a lot with operators so that they show us what is happening and we are not surprised by consumer behavior, but we can encourage subscribers to stay with us’.
Likewise, according to Lannuzel, ‘we tend to say that technology serves a business model. First, we must define the business model well (who do we want to sell to, what is the niche, what is the content); and other issues. According to a Reuters survey in the US, related to the 10 parameters that make customer retention, the first two are the quality of the content and the quality of the user experience. I would say that the third important parameter is the diversity of services (VOD, catch up, live, multiscreen), and, as solution providers, we must support this business model to retain customers, so that they have the same quality of experience’.
‘We are working with different operators. We recently announced a partnership agreement with Castalia, who distributes all of our content throughout the region, and we are having many conversations with various operators that are going to explode very quickly’, Sierra said.