Pay-Per-View: Back by Popular Demand
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 us, on any device at any time. Driven by the explosion of broadband and faster mobile networks, coupled with smarter and more powerful devices, our appetite for the next blockbuster show or sporting event is insatiable. Whether its watching Game of Thrones or the next big fight, our message to the industry is clear: We are no longer viewers, we are customers.
In this highly competitive market, traditional DTH operators have dominated the pay-TV landscape for so long, locking customers into lengthy contracts with great entertainment and sporting content in return. While new entrants in the shape of OTT such as Netflix and Amazon are disrupting the market by accelerating the content ‘arms race’ in a bid to secure new subscribers, it’s long been the power of sports that truly keeps a customer sticky. Traditional operators with the deepest pockets securing sports rights that dictate where and when a consumer can watch their latest sports team has for so long been the norm.
However, that is changing, and changing fast.
As all operators seek to secure new revenue streams and increase customer loyalty, pay-per-view (PPV) is increasingly becoming a viable option. Traditionally the remit of PPV has been exclusively for the dominant operator with the largest subscriber base. However, free-to-air broadcasters are increasingly bidding and securing sporting rights in a bid to drive paid revenue streams as advertising revenues continue to shrink. Even the new OTT entrants are bidding and winning rights all over the world, for example Amazon securing ‘Thursday night football’ in the USA and ATP Tennis in the UK. Even F1’s capture by Liberty Media will see a shift from the traditional approach to watching Hamilton race Vettel in racing circuits across the world.
With ad revenues on the decline and rights continuing to spiral in costs, the aim today is to maximize and sweat as much as you can by distributing wider across devices and platforms. This is why PPV as a proven addition to any existing subscription or ad-funded model and is on the rise.
Challenges around PPV
The thought of buying rights may be daunting, but once secured, that’s just the start. The normal approach is putting the infrastructure in place to manage the event, pre, during and post. Even the most experienced in PPV events struggle, with websites crashing and poor user journeys common, as highlighted again by the most anticipated fighting spectacle – Mayweather vs McGregor – suffering from live streams collapsing resulting in floods of complaints and refunds.
One of the biggest challenges of putting on a PPV event, in particular a live event, is the purchase journey. In our experience, 80% of purchases come in the last few hours before the event starts. That surge puts a pressure on customer registrations and entitlements, which if handled through already poor customer journeys, only serves to make the issue even worse. Clearly, the customer is not just purchasing or watching through the set-top box anymore and the myriad of platforms and devices to be catered for today increases the complexity and pressure leading up to, during and after the event.
The issue is much more deep-rooted than that. Yes, it’s critical to deliver a successful event but traditional PPV is very much treated in isolation – it’s one event, I sign up, I watch and I leave. Adios, until the next event, whenever that may be… As a free-to-air broadcaster launching a paid revenue stream with little or no relationship with your viewer base, your aim is to build a loyal base of customers over time. Treating PPV events in isolation simply does not solve the long-term customer loyalty issue.
The same is true for operators with an existing base of customers – how can I market to my base, when is a customer dormant, when will they likely purchase again and what event will tempt them back in? Can I personalise the customer journey to optimise the experience I give to my different customers? What if I want to offer a different genre of sport, who in my base is most likely to purchase?
The key to success is building a relationship with your customer over time. Levering content, both paid and free during the entire customer journey, encouraging early repeat purchases for example, or offering a longer tail after the event such as VR or access to premium content, is critical when delivering PPV today.
A PPV event is not just a one-off.
If you’re looking to launch a PPV service, discover our hints and tips for running a successful Pay-Per-View event here.