Carrier Content Strategies
THE Bottom Line
When it comes to understanding how CSPs are integrating light user or occasional user strategies and solutions into their full consumer BSS stack, and how CSPs are deriving revenue from this non-traditional group of customers, Linx has developed significant contacts and industry experience in this domain.
The target focus of this project was Subject Matter Experts at CSPs in developed markets that have strategies and solutions to acquire, retain, and monetize occasional users, in addition to the specific strategies, tactics, and pricing models employed by key competitors in this space.
Our research was designed to support the decision making process within enterprises by providing executives and corporate management with the data and information they need to make informed strategic choices.
For all of our projects, Linx relies on in-depth, double-blinded interviews with key executives at leading and niche players in the industry including vendors, service providers, customers and systems integrators / channel partners. Every study we complete is based on specific and detailed interview protocols established together with our clients that drive toward producing actionable intelligence.
What does our research show?
Based on our studies, we have established the following broad conclusions in this space:
1. Occasional Users are not a priority User Segment in North America for most CSPs we interviewed:
In our interviews with Comcast and Bell Canada executives, we found that occasional users are a low priority for these CSPs, as they do not feel that these subscriber segments have reached a size where they represent a profitable group to market services to. While both Bell and Comcast understand the growing trends that are leading to an increased number of occasional users, such as streaming and application-centric services, and that occasional user groups are growing in the geographic areas these CSPs service, they have yet to reach a point where they are a profitable business case, according to our interviewees.
For Bell Canada, there are limited occasional user services offered, specifically relating to voice and data, and SIM options for travelers visiting North America, but these are not marketed and are not integrated into their existing BSS stacks, according to our interviewee, a former Product Manager at Bell Mobility. Bell does not provide on-demand WiFi or 4G connectivity for occasional users, but does have limited voice and data services offered through purchasable SIM cards. These SIM cards do not require users to subscribe to Bell services, but are one-time purchases that allows a given amount of voice and data access, though these services are not marketed actively by Bell Mobility.
2. Occasional Users are of interest for future solutions:
For Bell, which in late 2015 was in the process of developing product and service roadmaps for the next 3-5 years that will account for and cater to occasional users, this is a growing user segment that must become profitable before Bell will begin marketing initiatives, or integrate occasional users into their existing architecture, according to our Bell Mobility interviewees. This interviewees outlined that when Bell had previously attempted to cater to occasional users, these were projects with significant ($5 million-$10 million) budgets, and that future projects to capture occasional users would match this level of expenditure.
For Comcast, the approach for future approaches to Occasional Users is less clear in their service roadmap. In our interview with a Senior Director responsible for Marketing and Product Management at Comcast, we learned that Comcast places higher value on gaining new subscribers, and current subscriber retention, and is investing in these existing and new customers. For travelers, particularly those who are already Comcast subscribers, Comcast offers services that allow their users to connect to the Comcast network across North America, through data subscription, WiFi hotspots, and mobile applications that allow subscribers to access cloud content when away from their home connection.
In this regard, Comcast is focused on providing a robust network that will allow users to be constantly connected, rather than looking to capture occasional users that will not represent ongoing revenue as permanent or long-term subscribers. However, like Bell Mobility, Comcast appreciates the growth of the occasional user segment, and their focus on network availability puts them in a strategic position to offer future occasional user services with their geographic coverage. As noted by our interviewees, Comcast does offer temporary one-time paid access to their networks for mobile users (at a high price point of $9.99 for 2 hours of service), however, this is not a service that is heavily marketed at this time, nor is it one driving revenue from the occasional user segment, according to our interviewee
3. Foxtel in Australia, Verizon in the USA, and Rogers in Canada have content-focused services targeted at occasional users:
According to a former senior technology executive at Presto Foxtel, his organization has three content-based services which would be targeted at occasional users:
• Foxtel Presto: a movie and TV series streaming service similar to Netflix
• Foxtel Play: streaming TV optimized for a range of different devices
• Mobile Foxtel: an app based subscription TV package specifically for mobile devices
None of the above services require contracts in order for subscribers to access services.
Verizon's Go90 service which was launched in October 2015 is also targeted primarily at "Occasional Users" and does not require a contractual obligation. The vast majority of the service's users would be younger users or "millennials" and the programming includes "live events, prime-time TV, best-of-the-web and original series across comedy, music, gaming, lifestyle, sports, news and entertainment." The Go90 service is free to use by customers and revenue is generated from advertisement.
The Rogers GameCentre Live service is based on an existing NHL application for which Rogers acquired the Canadian distribution rights. The service does not require a long term contractual commitment and can be accessed by occasional users for US$29.99/month and can be cancelled by subscribers whenever they like.
4. How Occasional Users are currently not integrated into existing BSS Stacks:
Strategic Product Manager at Bell Mobility, though there was an initial investigation into integrating occasional users into the existing BSS architecture, the cost of doing so was outweighed by the revenue from these users, and it was decided that it was not a cost-effective methodology. As a result, the current occasional user platform is not currently integrated in the Bell architecture, though with the upcoming product and services roadmap that is putting greater focus on occasional users over the next 3-5 years, this user segment will eventually become integrated into existing Bell architecture, according to our interviewees.
For Comcast, whose only true occasional user feature is one-time temporary paid access to their WiFi hotspots, this service is integrated into Comcast’s existing BSS solution. As part of product marketing, our Comcast executive noted that for occasional users, the infrastructure that would be used by non-subscribers having limited paid access to Comcast networks was built into their existing business solutions (and the hardware that enables occasional users to access Comcast networks is the same hardware that provides Comcast WiFi hotspots), allowing Comcast to leverage their existing infrastructure to accommodate occasional users without stepping beyond their existing solution footprint.
At Foxtel Presto, the service runs on an entirely separate SaaS-based BSS stack. The underlying BSS systems include:
• A cloud based video platform now owned by Telstra
• A US-based subscription billing & recurring payment solution
• A leading global CRM solution used at Presto
• A cloud based digital marketing solution owned by Salesforce
• A marketing analytics and reporting tool owned by a leading digital document solution provider
Based on our interviews with CSPs, we can offer the following key insights on the Occasional User Strategies of CSPs we spoke with:
Connectivity-based Occasional User Business Models are not seen as Revenue Growth Drivers among North American CSPs:
Given that five out of six interviews we conducted were with Tier 0/1 operators in North America (Comcast, AT&T, Verizon, Bell Canada, and Rogers), we can say with a high degree of confidence that monetization of occasional users by CSPs will likely not be based on offering connectivity-based solutions to occasional users. In all our initial interviews with CSPs (Comcast, AT&T, and Bell), connectivity-based use cases such as temporary anonymous Wi-Fi services or local SIM travel packs are already part of the IT stack of CSPs and connectivity-based occasional user growth is not viewed as a revenue growth driver for major North American CSPs.
Content/Video-based Occasional User Business Models are viewed as being more Viable, however, “Pay-as-you-Eat” use cases are not the priority for CSPs we interviewed:
Our interviews with Foxtel Presto in Australia, Rogers GameCentre Live in Canada, and Verizon’s Go90 service in the USA show that all three carriers view content/video-based services as being viable business models to attract what they call occasional users. In all three instances, there is a “no contract” monthly option available and in the case of Verizon Go90, all content is ad-sponsored. Further, for Foxtel Presto and Rogers GameCentre Live, existing subscribers to mobile or TV services can get access to these services at a significant discount. However, in all three cases, there were no “pay-as-you-eat” options by which users can come in to consume single videos on these services.
Connectivity-based Models likely to have some BSS Stack Integration, Content-based Models will likely be SaaS based:
Where our interviewees had some visibility into their respective BSS/IT stacks, it was clear that connectivity-based occasional user models will likely need to have some BSS stack integration. For example, our interviewee from Comcast pointed out that for their only true occasional user feature (one-time temporary paid access to their WiFi hotspots), this service is integrated into Comcast’s existing BSS solution. Perhaps the clearest indication of a stand-alone Cloud-based SaaS stack was provided to us by Foxtel Presto, which has deployed a completely different stack from the ones that are operational either at Telstra or at Foxtel.
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