What Does #NetflixEverywhere Mean for TV Operators?

The gloves are off, as operators fight for position against the reigning OTT TV champ


The 2016 Consumer Electronics Show (CES) was a historic one for Internet TV provider Netflix, as CEO Reed Hastings announced that the service has launched in 130 new countries around the world, making it now available in more than 190 countries worldwide. And to make it extra special, this announcement was made in real-time, as the service officially went live, during his keynote speech.

As exciting as this announcement was for those on the edge of their seats in that Las Vegas crowd, surely, it left many TV operators around the world shaking in their boots, fearful that Netflix is coming to steal their customers away. The truth is, this is a totally rational fear. Netflix has more than 70 million subscribers enjoying more than 125 million hours of TV shows and movies per day, and judging by its newfound reach, those numbers are only going to increase – exponentially.

Current TV operators are going to have to put up one heck of a fight if they intend to compete in a Netflix world. The best chance for an underdog to upset the favourite and win the ultimate prize – the customer, is to take the time to truly understand them and to personalise the service to meet their needs.

In 2015 and before, TV operators could get away with a one size fits all mentality. However, in 2016, Netflix has officially changed the game. Consider this the year of the customization of the customer experience. Operators must proactively monitor data from many different sources to really get a solid grasp on customer behaviours and preferences in order to tailor TV experiences to individuals.

All trained fighters must first master the four basic punches – jab, cross, hook and uppercut. But when it comes to fighting for TV subscribers, one must begin by mastering three key challenges.

  1. Customer acquisition – Are you customizing your marketing campaigns to address the sometimes subtle differences in preferences found among various demographic groups? For instance, Millennials may be getting all the glory, but it’s the 45+ set who has all the money, you’d be foolish to count them out.
  2. Customer retention – Do you reward customer loyalty? At 6% per month, churn rates are through the roof for OTT providers, compared to traditional TV. Analytics are key in identifying dissatisfied customers before they defect, and targeting them with loyalty offerings enticing them to stay.
  3. Profitability – Are you maximizing your profits?? Sadly, the vast majority of OTT providers have not. Aside from customer acquisition and retention, the keys to profitability lie in cutting costs and growing revenue. The former can often be achieved through process automation, while the latter can be realized via analytics to help support the creation of different business models

For operators to not only survive 12 rounds in the ring with a heavyweight, but actually come out on top, developing carefully crafted, data-driven customer personas are essential to tailoring the TV experience to not only meet but exceed the customer’s growing expectations of this quickly evolving industry. This is important for every stage of the customer lifecycle, from acquisition, to retention, through to monetisation and beyond.

Ready to fight back against Netflix? Download our new paper, The fight is on: Winning the pay-OTT battle for some serious knockout strategies.