Cable Embraces Big Data
TV set-top data -- and what companies can do with detailed audience metrics -- is a hot topic both inside and outside the cable industry. Viewership data promises new revenue streams from targeted advertising sales and the development of customized and personalized content services. Because of its potential value, more and more companies are diving into the set-top analytics business and developing new solutions for the cable market. However, while cable enthusiasm is running high, there's still the tricky issue of consumer privacy for MSOs. Strict regulations govern what information cable companies can track, and how they can manipulate user data to make more money. Of course, that's an issue at the top of every meeting agenda at all sorts of companies, not just communications service providers, following the Prism program revelations. (See Prism in a Big Data World.) "That's still very much a concern," says Patty Hager, solution architect manager with business analytics company SAS. "What we're chatting with clients about is taking the information and looking at … what segment does this consumer fall into?” In other words, Hager is looking at targeting groups of consumers, rather than individuals, to mitigate concerns about privacy. SAS is one of the new participants at the Cable Show this year. Hager says the company has attended the show before, but has never exhibited. While SAS has worked with cable companies for decades, it has focused primarily on billing data to help operators reduce churn. New sources of data, and new opportunities for data analysis, are what drove SAS to plan for a bigger presence at this year's conference. In the near term, Hager says SAS is aiming to help cable operators to use viewership data for marketing and sales purposes, as well as a tool in content licensing negotiations. The bulk of MSO video costs are tied up in programming fees, and those fees are determined, at least in part, by Nielsen ratings that indicate how popular a network's shows are. With detailed viewing data, service providers could bring their own metrics to the negotiating table to try to reduce content costs. Verizon Communications Inc. has reportedly already approached small and mid-size media companies with the idea of matching licensing fees to set-top-based viewing data. (See Virgin Plugs Concurrent Into Its CDN.) Hager doesn't think a wholesale shift will occur anytime soon, but that doesn't mean the data won't still prove valuable. "The Nielsen factor is just part of the DNA of that whole process, right?” he says. But service providers "can capitalize on their own goldmine of data assets and use that as a tool in that negotiation process." SAS is far from the only company with set-top data ambitions. Several familiar names have been vocal recently about collecting set-top data and putting it to effective use. FourthWall Media Inc. launched its MassiveData viewer index in 2012, and now claims to pull information from 1.8 million cable set-tops, reaching 4.7 million cable viewers. TiVo Inc.'s Research and Analytics unit (TRA) tracks set-top data from 48,000 TiVo households and combines it with survey data revealing viewer attitudes and purchasing intent. (See FourthWall Nips at Nielsen and TiVo Goes 'Psychographic'.) And, just last week, Rovi Corp. announced a new Audience Management Solution, which analyzes "aggregated and anonymous return path data from millions of devices in the field today." Big Data drives big savings
If set-top data is the sexy hook for cable operators, using Big Data to drive down operational costs is the easy sell. Guavus Inc. is a data analytics company that announced the acquisition last week of Pipeline, a software product from Applied Broadband Inc. that collects Internet Protocol Detailed Records (IPDR) data. (See Guavus Nabs Cable Pipeline.) Pipeline provides detailed information on network activity all the way down to the cable modem level, and the company claims its software is now licensed by "seven of the top ten MSOs in North America." Guavus Vice President Chris Menier says issues such as audience measurement and micro-targeting always get interest in conversations with MSOs, but, in the end, those items aren't highest on operator priority lists. Instead, he argues, the use of analytics for improving operational efficiencies is what gets cable companies to take action. In sales discussions, Menier says, "We're going to use the subscriber analytics application, but we're going to focus on how we can use that for capacity planning, or product engineering. And the integrated care network analytics application … that one hits home with just about every operator we talk to." Guavus offers a business intelligence platform along with use-case-driven applications for issues such as peering optimization, traffic engineering, and customer care, churn and experience drivers. At The Cable Show, CEO Anukool Lakhina is joining several cable operators, along with representatives from CableLabs and Cisco, on a panel titled "Living Large and Soaring Higher: How Big Data and Cloud Services Are Powering Cable's New Tech Era." Also on The Cable Show panel circuit is Nexidia Senior Vice President Ryan Pellet. He agrees that cable operators are on board with using Big Data to drive operational savings. Nexidia, however, is looking at an entirely different type of information from Guavus's IPDR records and DNS logs. Pellet says phone conversations between cable subscribers and customer care personnel represent the largest non-monetized source of data in the industry's arsenal. Nexidia processes those phone calls and then turns the resulting data into actionable information. "Some of our largest cable companies are passing 70,000-plus hours a day of audio through our hosted environment to understand what their customers are talking about," Pellet says. "How is a new promotion going? Or what are the specific issues that are happening today? Or, how are we doing from a competitive perspective with our pricing plans?" Five or six years ago, nobody in the cable industry understood how to access customer call data, or what to do with all of that unstructured information. But Nexidia now uses the data to understand product, customer support, and sales issues, all of which lead to fewer truck rolls and more satisfied customers. Pellet says Nexidia has gained traction with 50 to 60 percent of the market, and every MSO client has seen a 5x to 10x return on investment. Now that Nexidia is deployed with some of the biggest MSOs, including Comcast Corp., the company can also offer its solution cost-effectively to smaller service providers. Much of the work around determining what queries to run and how to apply data to specific challenges has already been done. As a result, Nexidia says the cost to extend its solutions to new customers is minimal. The next trend Nexidia sees on the horizon is the merging of structured and unstructured data. That's one of the topics that Pellet will likely address when he speaks on the Cable Show panel, "Untapped Asset: Monetizing Big Data and Interaction Analytics." Big Data in D.C.
SAS, Guavus and Nexidia are just a few of the companies that will bring their big data stories to the Cable Show. The schedule of sessions reveals several titles with big data themes, and such big MSOs as Comcast, Time Warner Cable Inc. and Cablevision Systems Corp. will all participate alongside technology vendors representing a wide range of specialties. In other words, Big Data has suddenly become a big deal in cable. — Mari Silbey, Special to Light Reading Cable