How Is CX Shaping Industry Trends?
Over the past few years, a major trend in customer experience (CX) has been personalization. Rather than having to buy a general subscription that gives a broad variety of channels – typical to local networks – subscribers want to choose their own channels according to personal preferences.
This has presented a challenge for networks and subscription services. Offering individual packages diminishes the benefits created through economies of scale. Still, because video is so competitive, there’s the sense that if your company doesn’t offer some level of personalization, competitors will. And subscribers will be lost.
At one stage this was something that the industry agonized over. When production and distribution costs started to rise, the debate was more centered on how to absorb the loss. Now this has changed.
The industry is now more focused on protecting margins, accepting that they won’t be able to remain in business if they don’t. The practice of passing rising costs to consumers has become the accepted norm. If a few subscribers are lost in the process, at least the business can maintain a healthier balance sheet in the long run.
Counting the cost of customization
In response to consumer demands for greater levels of personalization, several sports channels have now moved to subscription-based applications. The idea is that consumers can choose which channels and sports they want to watch without having to take up an expensive broad general subscription with channels that they don’t want to watch.
The problem with this model is that by the time the consumer adds up the subscriptions to all the different applications they want, the cost is not that different from what they would have paid on the general subscription offer.
Also, it gets very complex trying to determine which channels and subscriptions are broadcasting specific teams or leagues – especially as this can differ between states or regions. This complexity can actually have a negative impact on the customer experience as it becomes too difficult to personalize viewing options. It will be interesting to see how this pans out over the next few years and whether viewers will return to more traditional general subscription models or continue to pursue greater levels of personalization.
With expensive sports subscription channels, one way to offer personalization may be to tier different levels of subscriptions or be more specific about which channels are available on which apps or broadcasters. This will be closer to delivering what consumers want without the very expensive price tag attached.
Protecting assets – what is and what should the industry be focusing on?
One major trend in video and subscriptions is that service providers are cracking down on password sharing. There seems to be the belief that allowing subscribers to share passwords is eroding profits. The challenge is that this response isn’t sitting well with consumers and pirated service providers are all too eager to fill the gap.
These illegal service providers will offer pirated content for cheap and consumers eager to watch their favorite channels will rarely consider that it’s unethical or possibly risky (in terms of cybersecurity). As long as they get to watch, they really don’t care.
Perhaps instead of clamping down on password sharing with subscribers who are generating revenue, video companies should seek ways to protect their content to prevent piracy and illegal distribution. This would improve relationships with existing companies and better secure their content.
Is there really a real risk of losing viewers?
Concerns that viewers are simply cutting themselves off and subscribers will be lost are mostly unfounded. The industry needs to be patient. People are still watching but they’re just finding new ways to watch what they want to.
Content creators should be mindful that broadly de-aggregated distribution could actually frustrate more than engage consumers. They may have more choice, but if it comes at too steep a price it will negatively impact the customer experience.
When consumers start to look deeper into different subscription models and add up all the different apps that interest them, they may well decide to return to a more general subscription because it’s more affordable in the end.
As technology and distribution continues to evolve, the partnerships that built the video industry shouldn’t be forgotten. Instead, recognize that long-term relationships offer value and can help companies move closer to delivering more positive customer experiences.
