MORE THAN JUST BILLINGA guide to migrating to a subscriber-centric approach

Once upon a time, the television viewer was treated just like a number, a demographic, a location. A set of numbers to help drive advertising revenue, with the advertisers the true customers of TV operators everywhere. That mindset has been challenged and the TV and Entertainment industry has woken up to the fact, viewers are now customers. Customers who are free to decide on how, when and where they view content. Customers who can ‘dip in and out’ of services, move between operators and choose to spend money on their own terms.

With hyper-competition between services, pay-TV and OTT operators are all fighting to acquire customers, grow customers and stop customers from leaving. The differentiator? In this world, content has been king and the race to unearth the next blockbuster is the holy grail.

To support the growth in subscribers, the key questions historically being asked are, how can I monetise this content? How do I collect payment? However, is this billing-centric approach enough to increase long-term subscriber loyalty? With many operators struggling to keep hold

of subscribers for sustained periods of time, the emphasis needs to shift. Even the Netflix machine has started to see subscriber numbers slow down.

In this paper, explore why pay-TV operators need to shift from a billing-centric to a subscriber-centric approach. As competition for subscribers increases, learn how traditional Subscriber Management Systems (SMS) are no longer fit for purpose. Understand what is involved in migrating from a billing-centric to a subscriber-centric platform and why migrating data is just the start.

MORE THAN JUST BILLINGA guide to migrating to a subscriber-centric approach

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Once upon a time, the television viewer was treated just like a number.

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The TV and entertainment industry is undergoing somewhat of a revolution. Consumer viewing habits are changing at pace with a desire to watch content when and where it suits, on any device at any time. Driven by the availability of superior broadband and faster mobile networks, coupled by the explosion of smarter and more powerful devices, appetite for the next blockbuster show is insatiable. Consumer expectations are now much higher, demanding the best shows, the best viewing experience, superior customer service, and a desire to be understood and treated as an individual. Whether it’s watching Game of Thrones or The Walking Dead, our message to the industry is clear: we are no longer viewers, we are customers.

In this highly competitive market, traditional satellite and cable operators have for so long dominated the pay-TV landscape, locking customers into lengthy contracts with great entertainment and sporting content in return. Then there are the new entrants in the shape of over-the-top (OTT), whether large-scale global market leaders like Netflix, regional and niche players like Stan in Australia or even content producers like Disney trying to win customers with small monthly fees and no contractual tie-ins. Not to mention traditional satellite and cable operators fighting back, with branded OTT offerings such as NowTV in the UK and StarHub Go in Singapore.The fight to win the hearts, minds and wallet share of subscribers is certainly in full swing.

THE RISE OF THE CUSTOMER

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The fight to win the hearts, minds and wallet share of subscribers is certainly in full swing.

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Content certainly is ‘king’ and the rise of social media has fuelled the hype surrounding blockbuster shows, driving customer acquisition and sign-up to pay-TV and OTT services. However, what happens when their favourite show ends? Our research shows consumers see OTT like a ‘dip in and out’ service, choosing to leverage the flexibility offered by no contracts to cancel and move between providers. It’s also clear customers are willing to hold multiple subscriptions at any one time, just to watch their favourite shows.

In a more traditional satellite and cable service, consumers are increasingly looking for skinny bundles with lower costs and micro packages. There are also signs of cord cutting, where customers are leaving to leverage the flexibility offered by OTT services. The pressure is on to keep customers loyal for longer than the latest 12 episode run – especially when these can be consumed in no time at all, certainly over a binge weekend.

In our experience, content coupled with the right offer - typically a free trial of some description certainly boosts subscriber numbers. However, it takes much more than content to keep customers loyal. According to AT Kearney,

content needs to be supported by a strong brand and overall customer experience. Building a loyal subscriber base requires a shift to a subscriber-centric approach that aims to deliver a consistent experience across all key customer Decision Moments - Find, Join, Consume, Upgrade, Downgrade, Bill, Leave and Win Back. Building a marketing strategy based upon key Decision Moments is critical, especially when trying to understand what the best tactics are to target, acquire, retain and grow different types of subscribers.

So, what does this mean for the traditional billing-centric approach and technical infrastructure?

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IS CONTENT ENOUGH TO KEEP CUSTOMERS LOYAL?

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6

% planning to subscribeto an OTT TV service

% consumers considering signing up to more than one

% already subscribedto an OTT TV service

Globally almost half of OTT subscribers plan to cancel

within 6 months

Rich content and value for money are the main reasons consumers join and cancel TV services

40%

33%

57%

52%

29%

40%

Lots to watch Good value

Not enough to watch Too expensive Finished watching

17%

35%

6%

31%

33%

14%

37%

37

%

11%

40%

33%

9%

27%

30%

10

%

32%

32%

11

%

40%

24

%

20%

14%

30%

5%

24%

24%

7%

9%

15%

6%

14%

29%

10%

15%

27%

6%

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What does it mean for the consumer?

And for the pay-TV operator?

FIND JOIN CONSUME UPGRADE DOWNGRADE BILL LEAVE WINBACK

We need to encourage content

consumption across multiple devices to help

retain subscriber loyalty and drive

upsell.

We need to securely collect

payment for each service, in

multiple territories, currencies and

payment methods.

We want to actively market to churned

customers and convert as many

as possible back to paying customers.

I want to be able to seamlessly view my

favourite content anywhere and

through any device.

I want to be billed accurately, with

clear charges, on time, and using a payment method

that suits me.

I want to be able to start my service up again as and when

I want.

We need to provide a simple

and secure subscriber on-

boarding process, collecting all the information we

need for service delivery.

We want to stop customers from

downgrading with alternative offers, but would rather they downgrade than cancel their

subscriptions.

We don’t want the customer to

cancel but need to support an active

churn management programme that limits churn as

much as possible. Those who do

choose to cancel leave with a good

experience.

I want to sign up as easily and quickly as possible - with

minimum fuss.

I want the flexibility to downgrade my services package as and when I like.

When I want to cancel, I want to do it easily with

as little hassle as possible!

How can we cost effectively target and acquire the right customers?

We need to grow ARPU

by effectively marketing

upgrades to customers enabled

through an easy to use self-service

environment with automated

provisioning.

I want to watch my favourite show, movie or sporting

event - what service should I

sign up to?

I want the flexibility to upgrade my

services package as and when I like.

DISCOVER THE DECISION MOMENTS

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All too often, managing subscribers is an after-thought and driven with one consideration – that of billing customers. When implementing a SMS, billing was the key requirement. Am I able to create and manage simple subscriptions, bill customers accurately, and integrate with the relevant Payment Service Provider (PSP)? If yes, then job done.

However, this billing-centric approach has led to significant challenges. Many operators chose to build home grown platforms that have become rigid monsters to manage as their business scales and evolves. It’s not uncommon for operators to bolt on new functionality or add yet another CRM solution as a new service or offering is launched. Many operators already have issues with inaccurate billing and inferior payment options that are known to increase customer friction, ultimately driving churn. Others chose simple subscription management and payment platforms to get the business started. In both cases, this has resulted in a disjointed

infrastructure that is inflexible and difficult to scale, a landscape of multiple silos of data, and an incomplete view of each customer.

In a billing-centric approach, little thought is put into the overall customer experience of managing the subscriber, especially across each Decision Moment. This limits the performance of marketing teams as they are not armed with the insights required to run hyper-personalised marketing campaigns to key customer types and segments across each Decision Moment – a critical requirement when fighting to acquire, retain and grow subscribers. Ultimately, a billing-centric infrastructure hinders long-term growth, increasing costs and slows change as businesses evolve - ultimately delivering a great viewing experience but a disjointed and undifferentiated customer experience.

In many cases, the IT infrastructure supporting subscribers is focused on delivering the right viewing experience to the customer. Especially when launching a service for the first time or even extending an established service to OTT, significant emphasis is placed on ensuring the right Conditional Access (CA), Content Management System (CMS), Digital Rights Management (DRM) and even Online Video Player (OVP) are in place. Efforts are made to improve the online or app user experience, to implement basic recommendation and personalisation capability and provide rudimentary content search functionality. While the viewing experience is critical and consumers demand a TV like service on every device, it is only part of the story.

SUBSCRIBER MANAGEMENT IS JUST ABOUT BILLING, RIGHT?

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All too often, managing subscribers is reviewed with one consideration – that of billing customers.

Subscriber-centric SMS platforms are the glue to drive subscriber acquisition, retention and growth. Designed to reduce friction across the customer journey, subscriber-centric SMS should include:

• Core Subscription Management – flexibility to manage subscription-based business models (covering Pay-Per-View (PPV), Advertising Video-on-Demand (AVOD), Transactional Video-on-Demand (TVOD) and Subscription Video-on-Demand (SVOD)), product catalogues, product bundling, pricing, entitlements and discounts

• Billing and Revenue Management – Secure and accurate billing, invoicing, tax and international currency support, credit control and revenue management

• CRM and complete customer view – 360 view of all customer activity, behaviour and history, with full integration of data systems covering multiple customer Decision Moments

• Business Intelligence and Analytics – Real-time reporting on the state of the subscriber base, metrics such as annual recurring revenue (ARR), subscriber churn, retention rates, and customer lifetime value (CLV)

• Advanced Decision Moment Marketing – Personalised marketing based upon customer segments across each customer Decision Moment

Whether you are a new OTT service that is growing its subscriber base or an established traditional player looking to go-to-market quickly with a new proposition, what do you need to consider when migrating from billing-centric to a subscriber-centric SMS platform?

EVOLUTION TO A SUBSCRIBER-CENTRIC APPROACHIn order to help operators compete and differentiate in this hyper-competitive market, the next generation of subscription management needs to evolve into a unifying platform to help drive long-term customer loyalty. Data from multiple systems that are involved at different Decision Moments needs to be considered and integrated. For example, leveraging online journey information and webchat to improve acquisition. It’s only through a better understanding of customer behaviour, preferences, and persona can an operator deliver personalised marketing and differentiated experiences designed to get new subscribers on board. ARPU needs to be driven through increasing consumption of the service, while proactive customer engagement is critical to pre-empt subscriber churn.

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Data that drives Decision Moment insight

FIND JOIN CONSUME UPGRADE DOWNGRADE BILL LEAVE WINBACK

Online Marketing & Analytics

Digital Rights Management

Social Analytics

Recommendation & Personalisation

Payment Service Provider

Middleware/Screen Experience

Marketing Automation

Webchat

Online Video Player

Mobile Analytics

Conditional Access

Contact Centre

Content Management

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FIND JOIN CONSUME UPGRADE DOWNGRADE BILL LEAVE WINBACK

SUBSCRIBER-CENTRIC SMS PLATFORMO

PEN A

PIsOPE

N A

PIs

ADVANCED DECISION MOMENT MARKETING

BUSINESS INTELLIGENCE & ANALYTICS

CORE SUBSCRIPTION MANAGEMENT• Flexibility to manage

subscription-based business models product catalogues

• Product bundling • Pricing • Entitlements and discounts

BILLING & REVENUE MANAGEMENT• Secure and accurate billing• Invoicing • Tax and international

currency support • Credit control• Revenue management

CRM & COMPLETE CUSTOMER VIEW• 360 view of all customer

activity• Behaviour and history, • Full integration of data

systems covering multiple customer Decision Moments

Personalised marketing based upon customer segments across each customer Decision Moment

Real-time reporting on the state of the subscriber base

Integration into Marketing Automation

Integrations into key PSP environments

Integrations into key CA environments

Integrations into key DRM environments

Data integration and feeds to support

each Decision Moment

Data integration and feeds to support

each Decision Moment

OPEN APIs

OPEN APIs

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MIGRATING TO A SUBSCRIBER-

CENTRIC SMS PLATFORM

There is a perception that migrating from a legacy billing centric environment, whether home grown or not, is a complex task. In our experience, the actual process of migrating the data from a legacy platform to a new subscriber-centric one is usually straightforward. However, the job of migration is not just about data.

The move to a subscriber-centric approach is as much to do with processes that are historically billing-centric. One of the key mistakes many organisations make is to replicate the processes and data from the legacy billing-centric platform into the new, subscriber-centric one. This fails to solve the key reason for migration, to improve the overall loyalty across all Decision Moments.

When embarking on a migration, it’s critical to understand why things are done in a certain way and simplifying processes to be more subscriber-centric. This requires a mindset change within the organisation, but if done successfully will see dramatic improvements in key subscriber metrics. At Paywizard, we always

start with workshops to understand the current processes, helping to guide where changes can be made to become more subscriber-centric. There are often simple wins like providing the ability to report on employee sales conversion rates or reporting on customer cancellation reasons.

Once processes are tweaked to be more subscriber-centric, the actual task of migrating to a subscriber-centric platform is not as daunting as you’d think. At Paywizard, we’ve successfully delivered over 100 pay-TV projects and through our experience have put together a simple 8-step process for moving from a billing-centric to a subscriber-centric platform. These key steps are as follows...

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When migrating to any system, there will always be key integration points across the customer journey. In our experience, it’s always advisable to conduct an accreditation exercise with your new provider prior to going live. This process should examine all integration points and API usage to ensure a robust and performant overall solution.

The key to any data transfer is to migrate whilst trying to limit re-capturing of any customer information. Planning is everything, carefully considering what data is required, what will add value at each Decision Moment, and what can be archived. There may be different types of data to consider such as the transition of customer passwords or social media login information along with time-sensitive dates such as contract renewal, repeat billing and any pending cancellations. Consider carefully the data format required between systems and work towards a batch transfer.

Errors in payments significantly increase customer friction and can result in churn. Hence, this is a critical step in the process, making sure there is a seamless transition in the customer payment journey. The objective is to migrate existing customer payment references into the new subscriber-centric SMS platform. Many SMS platforms should have pre-integrations with many payment methods, however, migration actions will also depend on payment type such as SEPA, Direct debit, Credit Card, PayPal and Cash Vouchers.

In this step, consider the optimum approach to integrating the services from the new platform, including how to move logins, registrations, subscriptions, capture of payment details, customer self-care and any service entitlement checks to point at the key SOAP APIs.

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3

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MIGRATING EXISTING DATA

REDIRECT THE PRESENTATION LAYER

SET-UP PAYMENT METHODS

INTEGRATIONACCREDITATION

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One of the key requirements to monetise any pay-TV service is robust entitlement checks and content security. It’s important to ensure the new subscriber-centric platform is built to support any pay-TV solution and particularly DVB (Digital Video Broadcast) through DSat (Digital Satellite), DTT (Digital Terrestrial TV) and internet-based OTT (Over The Top TV). If the system manages Conditional Access activity through a third party then import any CA or DRM associated data such as viewing card identifiers, customer and viewing card history and device details. Then conduct testing for CA / DRM enablement and disablement messages and any listening activities with that provider.

Any subscription-centric solution should provide an administration console that enables the operator to manage its service including setting up subscriptions, discounts, asset management and marketing campaigns. It’s important to consider this as part of the overall migration process and any console should have the framework that enables presentation in a number of different languages.

Similar to step 4, any current billing-centric solution is likely to be integrated with other systems such as broadband services, operator billing, mobile phone services or even a fulfilment system. With any integration, the key is understanding what functionality and data can be transferred into the chosen subscriber-centric platform. The aim here is to reduce the critical failure points along the chain, simplifying the process where possible. Any functionality and data that can’t be transferred will then form the basis of the integration required.

When it comes to configuring your chosen subscriber-centric platform, there will be a number of areas to be considered:Packages and discounts: the subscriptions and associated discounts that will be sold online or via a customer service agent.Credit Control Cycle: the workflow process that automatically controls actions conducted when a customer misses a payment.Digital Assets: the digital asset data needed to operate a TVOD service.Reports: consider the standard and advanced reporting that need to be available straight away.Communication templates: email and white mail templates.Automated processing: map out any scheduler service that automatically runs a number of key services such as billing and credit control.

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7

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8

INTER-NATIONALISE

CONFIGURE THE SYSTEM

INTEGRATE WITHOTHER SYSTEMS

CONTENT & SECURITY ENTITLEMENT

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The pay-TV market is evolving at some pace, with new entrants disrupting the status quo. Customers are becoming even more demanding and expect value for money without being tied down to long contracts.

If we consider disruption in other established industries, in the end customers are loyal to the brand and service. Sure, the product must be right and provide value for money, but loyalty is earned through reputation and credibility. For example, banks and retailers have been trying to grapple with delivering a seamless multi-channel customer experience for many years. The successful ones leverage data and insights to understand and even predict the next best action along the customer journey.

While in the pay-TV market, it’s the lure of the latest blockbuster that drives customers to sign-up, content is not enough to keep subscribers happy and paying for the long term. It’s clear, operators need to work much harder to keep customers loyal for longer.

It’s even more critical the pay-TV technology infrastructure provides the

flexibility, scalability and functionality to support change at speed. A subscriber-centric platform with advanced subscription, billing and CRM capability provides operators with a platform to manage subscribers across the customer Decision Moments. Legacy infrastructures and billing-centric solutions (whether home-grown or off the shelf) simply struggle to keep up with the growing customer demands and speed of change.

Up until recently, the drive to leverage data and insights to personalise the experience is one the pay-TV industry has been slow to embrace. With a more flexible and customer centric infrastructure and approach, the holy grail of ‘knowing your customer’, will be within reach. The end result, understanding and personalising the customer experience for each of us.

THE FIGHT FOR LOYALTY

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YOUR SUBSCRIBERS

paywizard.com

About PaywizardPaywizard has been supporting subscription-based businesses for over 18 years. Our experience is real. Helping over 100 Pay-TV operators including: ITV, Setanta Sports, BT Sport, BoxNation.

We know what it takes to acquire, grow and retain paying customers. This insight is deeply embedded in all that we do.

With over ten million customers acquired, our Paywizard Agile Platform delivers advanced subscription, billing and CRM with performance marketing modules.

When combined with our consulting services and expertise, we’ve helped our clients deliver inbound acquisition rates of up to 90%, outbound campaigns driving up to 25% conversions, and churn reduction programmes achieving turn-around figures of up to 60%.

Ultimately we deliver personalised experiences across each customer moment. The result: happy and engaged customers.

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