Amdocs: Pay-TV Can Play With OTT

CHICAGO -- INTX -- Over-the-top services are slowly chipping away at traditional pay-TV subscriptions. But, according to a new study, there's a fairly simple way for pay-TV providers to hold on to their revenue.

In a global survey of thousands of pay-TV customers, Amdocs Ltd. (NYSE: DOX) and IE Market Research found that 51% of North American consumers planning to cancel or reduce their pay-TV subscriptions would maintain their monthly spend if service providers offered a unified interface for searching, discovering and watching both pay-TV and OTT content.

Creating a blended user interface (UI) is technically feasible, but most pay-TV providers have been reluctant to do so, presumably because they don't want to point customers toward competitive services. The exceptions in North America have been smaller and midsized cable operators, including Suddenlink Communications , Atlantic Broadband , Grande Communications and RCN Corp. Those service providers all use TiVo Inc. (Nasdaq: TIVO)'s platform for delivering Netflix alongside their own video services with a user interface that supports integrated search and discovery. (See Netflix Cracks Top 10 MSO.)

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The study also found that consumers rated pay-TV services highly for content choice, video quality and, perhaps surprisingly, service. OTT offerings, on the other hand, won out on price, multiscreen video features, content recommendations and overall user experience.

Pay-TV providers are experimenting with ways to improve their weaker attributes. New skinny TV bundles provide lower-cost subscription options. TV Everywhere initiatives are expanding service availability across multiple screens. And more advanced user interfaces are making it easier for viewers to find content they like.

However, the latest study results show that service providers still have their work cut out for them.

Outside of the OTT space, Amdocs and IE Market Research found that while consumers say they don't like to have their data collected by service providers, many are willing to allow it in exchange for better service. More than a quarter, 26%, indicated that they would allow usage information to be collected as a trade-off for personalized customer service. Similarly, 21% would allow it for tips on existing services, 20% would agree to it in exchange for new personalized services, and 20% would sign off on data collection if it meant improvements in the quality of the pay-TV experience.

Consumers in both the US and Canada also said they'd be willing to pay an average of 7% more per month to receive services "tailored to their viewing preferences."

In a final section of the study, consumers were asked about their willingness to pay more for higher-quality WiFi services. On average, respondents said they'd pay almost 10% more for advantages like a better connection speed, seamless connections across WiFi access points, automatic handoff to mobile networks and automatic login.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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