TelcoTV: Consumers Say Price Matters

Features are nice, but TV consumers care mostly about price, a Heavy Reading survey finds

Craig Matsumoto, Editor-in-Chief, Light Reading

November 12, 2008

2 Min Read
TelcoTV: Consumers Say Price Matters

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

About the Author(s)

Craig Matsumoto

Editor-in-Chief, Light Reading

Yes, THAT Craig Matsumoto – who used to be at Light Reading from 2002 until 2013 and then went away and did other stuff and now HE'S BACK! As Editor-in-Chief. Go Craig!!

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