By Nigel Waters
Customer Business Executive, Amdocs Asia Pacific
ONLINE streaming media services are a thriving but highly complex business. All players, be it OTT platforms or communications service providers, need to find their own way to juggle the multiple challenges at hand, including content economics, consumer behavior, market structure and technology choices, to win and retain customers. However, when these players come together, it’s a win-win situation – for the partners and especially, the consumer.
This is evident in the findings of a recent consumer survey by Ovum (Omdia), which shows that, in the Philippines, a greater proportion of subscriptions sold by regional and global OTT brands is being bundled with or billed by local carriers, PLDT and Globe. Nevertheless, it also reveals the Philippines has a smaller proportion of respondents (52 percent) with carrier-bundled media services than the other two emerging markets covered in the study (India and Thailand). The conclusion is that service providers in the Philippines are yet to realize the full potential of bundled media services.
Another interesting finding is that having access to their favored bundled media service made Filipinos spend more on their carrier plan and remain loyal to their service providers (44 percent). This is also evident in the fact that service providers who have already partnered with multiple OTT players to offer attractive bundled media services, are consistently growing their per-user revenue. OTTs, both regional and global, are also reaping the benefits, since such bundling allows them to quickly expand their markets, riding on the service provider’s reach and brand.
But forging the right partnership is not enough. Indeed, the study found that consumer propensity to spend more on mobile or broadband services decreases in the absence of the “near-perfect” bundle, the right experience and affordable pricing models. In some cases, they might even switch networks if the “right combination” is offered by someone else.
To create the ever-elusive perfect bundle and deliver a frictionless experience, service providers must be able to address the technical integration challenges of on-boarding multiple OTT partners quickly and efficiently. This means addressing the hassles of complex IT requirements, as well as the lengthy and cumbersome integration process, which make things more difficult for both CSPs and OTTs. Indeed, the survey found that many OTT players face difficult-to-resolve technical issues and long delays, often grumbling about how carriers could be doing a lot more to streamline their back-end integration processes. And although service providers are aware of this challenge, they’re getting stuck between their legacy, proprietary, process-heavy integration methods and their efforts to identify the right technology solutions. Such lack of alignment ultimately translates into a poor and frustrating experience for end-users, as it restricts content bundling options, and undermines the viewing experience of even those bundles that users are able to buy.
Service providers can address these challenges by creating a broad-based solution, enabled by a third-party, SaaS-based, multi-tenant platform that is API-driven and runs on the public cloud. Such a platform would allow them to monetize pre-integrated partner services such as on-demand-video and gaming, with the third-party solution provider providing full OTT support that includes OTT partner, subscription, and user lifecycle management. Furthermore, with pre-integration to an array of OTT platforms such as Netflix, iFlix, Amazon Prime Video, Disney+ and many more, it allows the operator to quickly launch and monetize multiple OTT media offerings.
Even if the solution is not pre-integrated with an OTT partner, there is no complexity or cost to add new OTT partners or maintain integrations, as there is no need to approach each partner to onboard them separately using their own proprietary systems. OTT partners can therefore focus on their core competence of dealing with content, while allowing service providers to build on their inherent advantages of managing monetization, subscriptions, payments, connectivity and devices, rather than struggling with partner integrations. For an end-user, this translates into a perfect bundle and a frictionless experience.
Yet even after the service provider overcomes the “right content bundle challenge”, they must still deliver a seamless user experience at a price that suits various user segments. Here, Ovum found that OTT media services are still unaffordable for most of Filipinos. With the average online video subscription costing P242, this is beyond the reach of 51 percent of consumers. At the same time, the survey reinforced that Filipinos have no issues with sharing data or viewing ads, if service providers make their OTT media services either free or less expensive. 75 percent of the survey respondents are willing to accept ads, while more than 65 percent don’t mind sharing personal data. Moreover, 72 percent prefer to pay per view, rather than take a full monthly subscription. The conclusion is that in order to successfully monetize, service providers must be able to create multiple billing combinations for different user segments – ranging from free content supported by ads, to small sachet packets, to one-time access.
As the consumption of online video streaming services continues to rise, further fueled by the economics of COVID-19, so too will Filipinos’ need for new and varied content. This intensifies the challenge to create a near-perfect bundle that is accessible via a single affordable plan. But if a service provider can rapidly on-board partners, quickly activate new services to meet the ever-increasing demand and deliver a frictionless experience at a right price point, they will be well-placed to grow their media business profitably.