We recently quoted “Bull Durham” as a lead-in to our first TVOT 2015 Preview column. In keeping with that pattern, we will wander into “The Field of Dreams” and state unabashedly, “If you build it, they will come.” And then they will go. And then they will come again. Over and over, again.
It’s called churn. We’ve been fighting churn in the legacy TV business for decades, and we’ve somewhat managed it by offsetting the disconnects with aggressive subscriber acquisition. And in the premium TV category, the subscriber acquisition promotions have, in fact, exacerbated the problem they were designed to solve: HBO subscribers may connect, incented by a promotion, for a season of “Game of Thrones,” and then disconnect HBO and connect Showtime for “Homeland.” And with TVE and On Demand catalogs, a short-term premium subscriber can catch up on virtually everything that has been aired in the prior year.
And now that Showtime has joined HBO in the direct-to-consumer arena, the churn virus will spread exponentially.
In our previous column, Tennis Channel’s Adam Ware wrote: “Everyone in the OTT subscription space is in the subscriber-acquisition stage of things. There’s tons of focus on how to launch, how much to spend, what kind of promotions work (free previews, etc.). And there’s tons of user data that we can all use to tell whatever story we want to. But, do any of us really have a handle (a true understanding/strategy) on how to
Before we go further, I gotta give a shout-out to Tracy Swedlow and her team for putting together another outstanding TVOT conference at the Golden Gate Club in the Presidio in San Francisco, June 23-24. And for “Star Trek” fans, the Presidio is the location for Star Fleet Command Headquarters!!! Here is a link to the schedule of sessions for TVOT 2015:
On Tuesday, June 23rd at the 2015 TVOT Show in San Francisco, the good doctor will be moderating a panel entitled, “It’s Not TV, It’s OTT.” And among our panelists, we have Mike Earle, CEO of aioTV; Claire McHugh, CEO of Axonista; Adam Ware, SVP and Head of Digital Media from The Tennis Channel; Adam Lowy, General Manager of Interactive and Advanced Television for DISH Network; and Paul Stathacopoulos, VP of Strategy and Execution for Rovi. We hoped to have Jim Theberge from Verizon, but Verizon’s pending acquisition of AOL required him to withdraw from the panel.
That left room on the panel for Bill Mobley, CEO of FreeCast. Bill sold 4 million Rabbit TV devices and subscriptions at Walmart and other retailers last Christmas, and anybody who sells 4 million of anything in the TV subscription space gets my attention!
So I asked Bill to answer the same question I put to the other panelists for the previous column: “What are the HOT issues (problems and opportunities) in the OTT space that you see coming down the pike.” Bill’s response suggests his new platform, Select TV, is designed to combat churn:
“There are two overriding issues that I see. First is the importance of aggregation: new OTT services are going online every day: HBO, Showtime, CBS, and more. While on one hand, that’s great for consumers who now have access to so much more content, the total TV experience suffers, because what once took the push of a button now requires users to hunt it all down themselves. Consumers expect convenience: they want to be able to access whatever they want quickly and easily, without having to spend a lot of time just getting there. The pressing need in this industry is not one more content library, but a single aggregation point through which consumers can get to everything they want to watch from an unlimited number of sources, both free and paid (a la Google).
“Second is the balance between value to consumers and value to content producers. There are many challenges associated with creating an OTT platform that is both attractive enough to content producers to entice them to participate, AND convenient enough for consumers to create a good experience that ultimately allows the service to become commercially successful.
“FreeCast has 4 million cord-cutters and cord-nevers who have purchased our Rabbit TV Plus service in the last 22 months from over 35,000 big box retail locations, including WalMart, Target, Sears, Office Depot, Best Buy, Walgreens and many others. Additionally, we are launching our new Internet Retail Card product in over 180,000 convenience stores, supermarkets, gas stations, etc. We anticipate a total of 10 million+ subscribers by EOY 2015.
“We are launching our set-top box platform this summer–Select TV. This platform will provide great benefits to current Rabbit TV users who wish to upgrade, as well as target new consumers and even commercial customers, with these key features: connecting all these Internet channels to your TV and other devices, including live local channels via an antenna, a single monthly bill for all your subscription services, and a universal program guide and catalog. I believe we are the first to do that.
“And because of our platform and our reach, we can provide automatic subscriber retention and acquisition for our content partners. If, for example, a viewer is watching ‘NCIS New Orleans’ (starring Scott Bakula), either on CBS Broadcast (with a digital Over The Air antenna) or on CBS All Access, we would suggest other programs and movies featuring Scott Bakula: ‘Star Trek Enterprise’ on CBS All Access and Netflix;’ Quantum Leap’ on Netflix; or ‘Major League Back To The Minors’ on Amazon Prime.
“The concept is simple (as all great marketing is); the execution is the trick. If the viewer already subscribes to the service we are pointing to, we are reinforcing the value of that subscription; that’s subscriber retention. If the viewer does NOT subscribe to the service we are pointing to, a simple one-click free trial is a phenomenal subscriber acquisition tool, while the inclusion of pay-per-view options allows both the user and the content provider to be able to do business with or without becoming a subscriber. Either way, it all starts with the CONSUMER’S INTERESTS. That’s contextual subscription television marketing.
“I won’t say that Select TV will stop churn. Because, frankly, you can’t. But with our reach, our emulation of the cable and satellite MSO offering, and our marketing strengths, churn becomes a growth tool. We make churn work for our partners.”