Pay-TV Providers Neglect Customer Experience at their Peril

London, UK, January 26, 2016–Pay-TV operators can no longer simply rely on the strength of their content offering to maintain subscriber loyalty but must raise their customer relationship management game to gain ground in an increasingly competitive marketplace, new global research from subscription, billing and CRM specialist Paywizard shows. The survey of more than 6,200 consumers reveals 24% have cancelled a digital pay-TV service in the previous 12 months because of poor customer experience, while 84% say they would terminate a relationship with a TV provider if service and support were lacking and the company seemed out of touch with their needs.

The survey, which includes findings from Australia, Brazil, Germany, Singapore, the United Kingdom and the United States, also reveals 46% of consumers have retained a digital pay-TV subscription they might otherwise have cancelled because of positive customer experience. The findings show younger consumers place greater value on customer experience when it comes to sticking with a provider, as 57% under age 35 say this has been a factor in keeping a service over the past year.

Bhavesh Vaghela, Paywizard’s Chief Marketing Officer, says: “We are seeing a fundamental shift taking place in the pay-TV marketplace, with customer experience emerging as critical to television service providers’ success – in many cases, their very survival. While content and cost are often cited as the elements influencing pay-TV uptake and cancellations, the survey findings demonstrate that customer experience has undeniably emerged as a major driver. This is particularly true for operators of over-the-top (OTT) services, as simply relying on a decent content offering is no longer nearly enough to build loyalty to your brand.”

He adds: “With industry projections indicating roughly a billion pay-TV subscriptions are up for grabs this year – and billions in revenue are on the line – it is clear from the research that pay-TV operators today ignore customer experience at their peril.”

The research also demonstrates that to be on the winning end of consumers’ decisions regarding their TV and entertainment budgets, pay-TV operators must overcome a ‘dip-in, dip-out’ attitude on the part of subscribers. The survey reveals most consumers intend to drop some pay-TV services – for instance, cutting part of a cable or satellite package – if they take another, such as an on-demand video subscription. The research shows 64% of those who have not taken a new subscription in the past would cut back on other digital subscriptions or downgrade a general package to bring down the cost if they were to sign up to a new or additional pay-OTT service.

The findings indicate, however, that in practice pay-TV operators providing a positive customer experience can beat the odds. In fact, the survey reveals 74% of consumers who have added a digital pay-TV subscription over the past year end up increasing their overall spend on television and entertainment. On the other hand, more than a quarter still reduced total TV spend by downgrading their general pay-TV package or cutting other subscriptions – making clear that there are losers among operators that fail to build strong bonds with their customers.

Vaghela notes: “The research leaves no doubt that to stay on the right side of the TV spend equation as more options emerge for consumers, all pay-TV operators – particularly those that don’t tend to lock subscribers into fixed-term contracts, such as many OTT providers – need to ensure they take their brand beyond its content offering by providing consistently excellent customer experience. In other words, providers of all stripes need to be proactive in engaging consumers at each key decision moment along the customer journey.”

He points to the survey figures showing that 78% of consumers say, while good content is important in choosing a digital TV service, factors such as brand reputation, flexibility, attention to customer preferences and understanding of their needs are crucial to retaining their business.

“Consumers have more options than ever and they are not afraid to use them,” Vaghela says. “For cable and satellite players moving into OTT as well as pure-play digital brands – whether global players such as Netflix and Amazon Prime, or local challengers such as Hulu in the US, Now TV in the UK and Foxtel Play in Australia – using consumer data and the right subscriber management tools has become vital. Not only will great customer experience be critical to future success for pay-TV providers; the research proves it’s already essential.”

Download the full report, Facing the perils of failed customer experience: Why pay-TV operators need to love their subscribers, here.