MSOs are getting crushed by their over the top rivals when it comes to TV Everywhere – an area where the only thing they have to do to become more competitive is to let their customers know that they are, in fact, competing.
Tablet owners are significantly more likely to use over the top (OTT) service apps such as Netflix than those offered by both TV networks and operators, according to The Diffusion Group (TDG). And the biggest reason OTT providers are eclipsing cable operators with tablet viewership, according to Michael Greeson, president and director of research at TDG, is because MSOs inexplicably are not promoting their own TV Everywhere apps.
Greeson’s advice to MSOs: “Market the damn things.”
Almost half (48 percent) of adult tablet owners report using OTT video apps on occasion, compared with 37 percent that use broadcast network apps, 31 percent that use cable network apps, and 23 percent that use TV operator apps.
ABC and NBC are good at promoting their apps. MSOs? Not so much. And it’s not because MSO apps aren’t ready for primetime. “I use the Comcast app,” Greeson said. “It gives me all the broadcasters in one app. That’s a tremendous advantage.”
TDG has been compiling evidence for years now that TV is going increasingly app-based, and the organization insists TV will end up completely app-based, possibly as early as 2020.
OTT providers are going straight to the consumer, and operators understand clearly that that’s a challenge. “It’s in their interest that everything goes through their gateway – their app,” Greeson observed. “It makes the service more sticky. It appears to increase loyalty. It appears to diminish the desire to cut the cord. But they’re not marketing it, and if they are marketing it, the marketing they do is absolutely pathetic. Their only ads are on page 2 or page 3 of the bills they send out.”
Greeson’s indictment covers all cable operators, but he’s especially perplexed by Comcast, a company that is spending vast amounts on marketing. Why not divert just a percentage of its marketing budget to promote its apps?
He also noted that cable operator apps get lost in the crowd in Apple’s App Store. It would be easy for all cable operators to get together, and establish a page in the app store where all cable subscribers could go to choose the TV Everywhere app offered by their provider. Easy to do, but cable just isn’t doing it.
Could the lack of promotion be deliberate? Might cable operators be unprepared for the inevitable increases in usage? Could they be worried about their networks being overloaded?
Greeson doesn’t believe t
hat. First, he believes that cable operators absolutely do have the capacity. Furthermore, it’s not as if the capacity isn’t being used right now by cable’s OTT competitors anyway.
Beyond that, usage could translate into incremental revenue. Some operators have bandwidth caps; if viewers go over the caps, they can be charged. Who leaves behind incremental revenue, he asked?
It’s early in the game, Greeson allowed, but cable operators still have to make promoting their apps a priority, and they just aren’t. “Their priority is to reduce subscriber losses. This will do that, but they’re just not seeing it that way. ‘We’re getting to it,’ they tell me.”
“Nielsen is telling them that the TV is still the main viewing platform, but the networks are very excited about viewing on tablets, and they’re pushing it. Operators? The TV is still the center of their universe. They’re ignoring the fact that 75 percent of tablet viewing is inside the house. It’s not a mobile device; it’s serving as a secondary TV set.”
