COVID-19 pandemic has taken an alarming toll on people’s lives. It has led to changes in the economic, societal, personal, and corporate front. However, with all the uncertainty about what the future will present, it’s quite clear that it will be consumer-led. A shift towards customer-centricity was a necessity for businesses before the pandemic. Now, the economic fallout from COVID-19 has given a sense of urgency to it. As consumers chart their way forward, they look at businesses for insights and guidance.
The shift in market dynamics
The pandemic has resulted in a significant shift in customer behavior and market dynamics of cable TV and streaming business. The future of cable TV has looked bleak for a while; however, coronavirus appears to be accelerating the decline. The immediate impact observed by businesses across the world were driven by the following:
- Halt in live events and new content creation,
- Reduction in new connections due to sports suspension and digital channel remaining as the only route to market,
- Heightened demand for in-house entertainment especially for streaming channels,
- Movies sent straight to home to keep the audience engaged due to cinema closure,
- Reduced advertising demand from hard-hit sectors that have been traditionally heavy advertisers on TV (e.g., travel, retail, betting) and also due to sports suspension,
- Mandatory diversion towards website and less of call-center for query resolution.
The implications are wide-spread and will continue to plague many key functionalities and operations over short to mid-term. The quarantine has stoked the consumers’ need for content and hastened the adoption to non-traditional platforms. Routines like weekdays, schools, work outside home, no longer exist for most, making the real-time TV schedules suddenly redundant.
Customer Value
In-home, entertainment has become important in today’s time. Customers want flexibility and ingenuity when it comes to seeking value for their money. We are now seeing:
- Pricing pressure for both new acquisition and renewals to continue until a complete return of sports to the screen,
- Increased consumer price sensitivity especially at the time of renewals and value-seeking behavior,
- Fighting off the competition with OTT channels to win new customers, as those are perceived to be cheaper options,
- Growth in OTT platforms may drive a structural shift away from Cable TV platforms, signaling a change in content consumption habits.
Digital Experience
The entertainment choice today is in the home. What we can see is a stronger demand for in-home entertainment in the post-COVID-19 recovery stage as well. An accelerated shift to digital is essential to create revenue streams. Speed and agility are important as the digital world is an environment that goes through constant change. We today are observing:
- Unprecedented traffic on the web and app till the time other RTMs are back to full capacity.
- Acceleration of user activities from offline channels to browser and apps leading to the resultant need for companies to be amongst one of the most used apps on smartphones.
- Increased need for improved discoverability and recommendations of existing contents across platforms, to counter lack of live events and new productions.
Customer Service
Brands are expected to move in unprecedented speed to serve consumers. It means re-evaluating how contact centers are leveraged and how employees deliver quality customer experiences. The emotional state of consumers is a challenge that the employees also have to deal with. Businesses are today struggling with:
- Sub-optimal experiences faced by customers due to prolonged inability to connect with call-center reps.
- Account for increased call handling time and abandonment rates.
- Manage the expectations/experiences of “habitual callers.”
- Prepare for a huge spike in pending service requests volume and complexity in the post lockdown period.
Content Engagement
As we move towards recovery from this crisis, consumers will continue to look for entertainment to relieve from the daily grind and de-stress. Engaging with consumers now will help businesses to stay at the top of mind and help understand what they are looking for in the new normal. Businesses should now connect with consumers by:
- Revisiting content scheduling decisions to fill for gaps created by a halt in the new production.
- Consolidating loss of new content through improved discoverability of existing content.
- Increasing time available for viewing increasing content piracy as well.
- Following the mandate for social distancing, impacting the social nature of sports/entertainment, that is usually enjoyed and consumed in a group setting.
Increased focus on customer centricity
A shift towards customer-centricity was a necessity for businesses before the pandemic. Now, the economic fallout from COVID-19 has given a sense of urgency to it. As consumers chart their way forward, they look at businesses for insights and guidance.
Customer centricity today remains the cornerstone of our recommendations for all functionalities and operations.
Understanding emerging consumer needs, rapid prototyping, and cautious scaling are critical to navigating the change.
The organizations have the opportunity to generate or save c.$300M annually in revenue across the four areas highlighted above. The key lies in driving hyper-personalization, digital efficiency, and consolidation of value to improve customer experience in a changing E&M eco-system.
* Estimate based on Fractal use cases from Cable TV and Streaming industry
Bringing AI, engineering and design to drive customer experience
The proposed solutions to tackle these challenges are based on three key principles:
- AI: Using state-of-the-art Artificial Intelligence and Machine Learning algorithms to generate quick, accurate and meaningful insights from the data
- Engineering: Leveraging on-cloud / on-premise infrastructure to create data pipelines and feed information into the algorithms in an efficient and scalable manner
- Design: Enabling transparency and easier consumption of insights for the end-users to drive strategic business interventions
Insights and References
Covid-19 Insights:
- Implications of Covid-19 on cable TV and streaming business
- Cross industry insights & playbooks to manage Covid-19
- Opportunities in the Information & Communication Technology Sector
References:
- The New York Times (April 2020)
- Forbes (March 2020)
- The Guardian (April 2020)
- Atos (May 2019)
- Persado
- Contentsquare
Authors
