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TelcoTV: Consumers Say Price Matters

Craig Matsumoto
11/12/2008
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ANAHEIM, Calif. -- TelcoTV -- A Heavy Reading survey of consumers indicates that lowering prices is the best way for a TV service provider to stand out from the crowd -- a conclusion that might seem obvious, but which will still likely come as a disappointment to telcos.

The finding that low prices figure high on customer wish lists is just one of the survey results being presented by Heavy Reading analyst Adi Kishore in a session here scheduled for 1:00 p.m. Pacific today, in Room 207A of the Anaheim Convention Center.



Heavy Reading asked just fewer than 200 consumers who they'd like to get their TV service from, and how satisfied they were with services such as networked DVRs.

"In terms of satisfaction levels, the one thing that's low is price," analyst Adi Kishore says. "You would expect it to pop up," he admits, "but it's coming up everywhere."

The economic crisis likely plays some role in that trend, because the study was very recent, carried out in late October and the early days of November.

The problem for telcos and other TV service providers is that they're hoping to make their services stand out with features other than price, and preferably features that would tempt people to pay extra.

But consumers don't seem particularly unhappy with any of the services they're already getting, as they gave high satisfaction levels to their digital video recorder (DVR) and video-on-demand (VOD) services.

"The bad news [for telcos] is that they might have to compete on price," Kishore says.

Even the type of provider doesn't seem to be an inherent issue. It's true most people are still getting their TV services from cable operators, but that's because cable is the default provider, Kishore notes. Satellite companies are the second most popular type of TV provider, followed by telcos.

"That ranking is not, to my mind, a huge issue. What is an issue is the percentage of people who have no preference," Kishore says.

That doesn't mean operators should stop looking for other ways to compete. Middleware vendors like Microsoft Corp. (Nasdaq: MSFT), Latens Systems Ltd. , Minerva Networks Inc. , and Orca Interactive Ltd. are pushing to create better ways for viewers to find content online, since the vast number of TV content choices is rendering many current programming guides inefficient.

Those application developers are also experimenting with ways to fold social networking services into the mix. Orca's TelcoTV demo, for instance, includes a Twitter-like bar that shows viewers' comments about whatever they're watching.

— Craig Matsumoto, West Coast Editor, Light Reading

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optodoofus
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optodoofus,
User Rank: Light Beer
12/5/2012 | 3:27:17 PM
re: TelcoTV: Consumers Say Price Matters
>Orca's Telco TV demo, for instance, includes a
> Twitter-like bar that shows viewers' comments > about whatever they're watching.

I would pay to NOT have this feature. Maybe TV providers should start piling on a bunch of useless annoying features and then have people pay to not get them. Kind of like how the phone company charges you to not list your number in the phone book.

optodoofus
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digits,
User Rank: Light Beer
12/5/2012 | 3:27:16 PM
re: TelcoTV: Consumers Say Price Matters
Quick - patent that service plan!!

I am guessing that, like me, optodoofus was born before 1990 and has an in-built aversion to stuff like Twitter -- the Bebo generation will likely love all that stuff....
Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 3:27:16 PM
re: TelcoTV: Consumers Say Price Matters
Funny! Thanks, Optodoofus!

Believe it or not, Orca brought that up in our demo. The Twitter bar is totally optional and only appears if you tell it to -- and Orca expects that most viewers under 30 won't tell it to. :)

There's a subtext here. After all the early adopters and techno-nerds are on board, maybe the best bet for audience expansion is to appeal to twentysomething hipsters and teenagers.
materialgirl
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materialgirl,
User Rank: Light Beer
12/5/2012 | 3:27:12 PM
re: TelcoTV: Consumers Say Price Matters
No matter what these telco guys to with their complex and expensive walled gardens, it will be years behind what people are doing on the open internet. No wonder no one wants to pay. They already get it for free.
FbytF
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FbytF,
User Rank: Light Sabre
12/5/2012 | 3:27:08 PM
re: TelcoTV: Consumers Say Price Matters
How scary is it that telco's and cable co's are surprised that price matters? 80% of what's in the "bundle" is crap no body wants. Let the consumer buy what they want and control their costs and you'll find out quickly what's valuable and what's not. 500 channels would thin out pretty quickly if no one subscribed to them.
DCITDave
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DCITDave,
User Rank: Light Beer
12/5/2012 | 3:27:07 PM
re: TelcoTV: Consumers Say Price Matters
Here's Adi talking about the data his survey revealed on LRTV:

http://www.lightreading.com/tv...
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