Monetization of OTT Video Services: Shift from Standard Usage Based to personalized value based offerings
With the advent of latest content streaming technologies and concepts like TV Everywhere and with the number of connected devices soaring worldwide, Pay TV operators find themselves in a powerful position in the market to capitalize on new revenue streams.
The emergence of OTT services and the proliferation of providers that offer content and services have caused both opportunities and challenges. Two major players in the Pay TV OTT ecosystem are Content Owners and the Pay TV Operators. Currently, operators are facing challenges to monetize OTT services in order to become profitable while investing on a suitable network to make it OTT ready. On the other hand, it has become imperative for Pay TV operators to provide OTT services to complement their existing TV services to preserve the attractiveness of the product, to address the multiscreen demand of consumers, to be device agnostic and reach beyond the constraints of their own network platforms. Operators need to find innovative ways to monetize OTT services rather than raising subscription fees or product fees.
Operators have to be more pro-active and responsive in order to prevent the risk of only becoming a connectivity provider instead of being a personalized customer experience provider. In order to achieve the same, operators have a unique asset that the others in the value chain do not have: customer knowledge. Because providers see all the activities of a given customer, providers could leverage that asset to offer more targeted services and promotions to their own customers and new customers outside their network. At the essence of monetization is the shift from standard usage based plans to personalized value based plans that encourage OTT usage. This includes service-centric pricing that accounts for who, what, when, where, and how subscribers are using their OTT video subscriptions in the operator’s network. Value-based service plan pricing enables a subscriber’s usage patterns to be priced based on the device(s) they are using, usage location, time of day, video-specific usage volumes, and video application prioritization. For example, offering an OTT video add-on service for a small additional fee.
For Pay TV operators to provide personalized value based offerings and then perform pricing based on their usage, the Billing & CRM system should have a strong Analytics & Business Intelligence platform which provides insights into customer usage patterns to optimize pricing plans, next generation Product Catalogue which is capable of creating personalized product plans, charging and billing which can price based on the usage and customer behavior, and effective Campaign Management to carry out targeted promotions as a continuous activity. An effective partner management function is also critical in the content delivery context so as to settle the revenue to be shared with the content providers / aggregators.