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Reader Forum: What opportunities lay ahead for pay TV?

CSG International notes ways pay TV providers can tap existing resources to offer enhanced services to customers and stave off cord cutting

We’ve all read it and heard it – in the evolving digital landscape, pay TV providers are facing increasing pressure to adapt their offerings to stay relevant and meet the needs of today’s consumers. But, it’s important to consider that while streaming services like Netflix and Hulu have been grabbing headlines for their ability to attract today’s cord cutters, cable companies are still the dominant provider of TV content for most Americans. In fact, 83% of U.S. households are still cable subscribers.
To maintain their dominance, a number of cable companies have been exploring more personalized bundle offerings and delivering new cross-device viewing options designed to let consumers tap into their favorite shows from more locations. But, beyond creating a more customized and easily accessible video experience for consumers, new services that have not necessarily been a part of the service providers’ domain in the past are about to become disruptors in the battle for customer loyalty.
As pay TV providers consider their next moves in digital services, their thinking is extending well beyond television viewing. While video is the killer app, data is what will truly make service providers money and differentiate them against the new over-the-top competition. Being the network provider is a huge asset for cable companies and offers an almost limitless market for innovation, not only around pricing but on potential future bundles as well.
Here are three ways we see the future bundle disrupting the status quo and expanding cable’s opportunity to leverage their best strengths and competitive advantages.

Bring the smart home to life

Service providers are starting to see the potential in services that look to connect in-home technologies. In fact, in a recent survey conduct by CSG and Pipeline Market Research, 40% of service providers noted they recognized revenue potential in exploring “Internet of Things” offerings.
By including home automation services that leverage IoT technology, such as security systems, thermostats and even home appliances with traditional cable offerings, service providers can tap into new revenue streams, while also offering consumers a more personalized experience. We have already started to see some companies embrace the IoT, such as AT&T with its Digital Life offering, which integrates home automation and security into a new monthly bundle.
If service providers own the network, they give themselves the power to most effectively manage the devices and overall ecosystem of devices on the network, making it a stickier situation for consumers if they choose to leave a provider. The next-generation universal app won’t just control the content consumers are viewing, but grow to encompass control over all aspects of the home technology network.

Tap into Wi-Fi for voice and data

Wi-Fi is another area where providers have started to experiment in developing creative new bundles. One example from Cablevision was the introduction of Freewheel, which is a mobile service offering that uses Wi-Fi to offer a mobile phone service to existing Cablevision subscribers.
While experiments in Wi-Fi-based calling are still in their infancy, offerings like Freewheel show the potential for service providers to take advantage of assets they already have, such as being the primary Wi-Fi providers for the majority of American households, to pair and match complimentary services that add-on to their traditional bundle.
The global Wi-Fi hot spot market in particular is expected to reach $4.54 billion by 2022, making it a huge opportunity for service providers to introduce offerings to both consumers and corporate partners. For example, offering day passes to subscribers who are traveling, allowing them to tap into the network via hot spots or local coffee shops having a code for customers that allows 30-minutes of Wi-Fi access.

IP enablement opens the door for new personalized service offerings

In taking advantage of existing assets, another potential area for cable companies to expand their portfolio of offerings is in tailoring new approaches to content dissemination.
One example of this is hyper-personalized advertising options that cater to consumers both in terms of viewing channel – whether someone is tuning in from their phone, tablet or computer – and in terms of their content preferences. For example, catering ads for fashion and lifestyle products to subscribers whose content mirrors those interests.
In addition, the combination of academic organizations and IP enablement can change (or create) the relationship between a pay TV provider and the younger generation who are most likely to cut the cord with cable. Working with universities to develop a bundle of services for students, while enabling students to purchase content beyond outside of the bundle, can transform the relationship the service provider has with both the university and directly with the student consumers. This application could also extend beyond unverisities and be applied to hotels, resorts and apartment complexes.
As the media landscape continues to evolve, service providers have a great opportunity to build on their subscriber dominance and re-engage consumers in new and innovative ways. By rethinking the traditional subscription structure and thinking outside the box when it comes to new service offerings, pay TV providers can reassert their hold on the consumer market, and ensure they continue to be a mainstay in American households for years to come.
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