TV Everywhere Better for Customer Retention Than Revenues

  • Online Video
  • TV Everywhere
DALLAS - Multiscreen solutions and streaming options will be valuable in retaining and acquiring subscribers but limited in their ability to expand average revenue per user (ARPU), according to a new study from research firm Parks Associates.

Parks Associates released findings from a multicountry consumer study that showed between 15 percent and 30 percent of broadband households in North America and Western Europe are interested in a TV Everywhere solution. Among the countries surveyed, the U.K. has the highest level of interest in a TV Everywhere solution, with nearly 30 percent of broadband households interested in a service that allows them to view TV programming on multiple devices, including tablets, smartphones, and connected CE.

"In the U.S., Netflix Watch Instantly is having a major impact on TV viewing trends, with 22 percent of all broadband households using this service, more than those who use Blockbuster retail stores," says John Barrett, research director at Parks Associates.

The study outlines how providers can leverage TV Everywhere to increase net additions and entice pay-TV subscribers to consolidate mobile phone and Internet services. Roughly 15 percent to 30 percent of broadband households are willing to pay additional fees to obtain this service. However, one-third of all broadband households would switch to a provider that offered free TV Everywhere, and 10 percent to 20 percent would consolidate mobile phone and Internet services, if necessary, to obtain TV Everywhere. As a result, its potential to drive ARPU gains directly is limited.

"You can charge additional fees for TV Everywhere as long as nobody else offers it for free," Barrett said. "It's a great example of the prisoner's dilemma in economics. As soon as one player offers it for free, everybody will be forced to do so, or they will start bleeding subscribers."

For example, when Fox recently erected a pay wall for its content, limiting initial online access to pay-TV service subscribers, there was a noticeable increase in the downloads of Fox shows on torrent sites, highlighting the difficulty of implementing pay models for multiscreen video.

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