Thursday, October 13, 2016

Continuing Chaos in Cord-Cutting Value Propositions...

"The Definitive Guide to Cord-Cutting in 2016, Based on Your Habits," by Brian X. Chen of the Times, notes that:
Every quarter for the last few years, hundreds of thousands of American households have put an end to their TV subscriptions, fed up with the costs of cable subscriptions, channels they never watch and the annoying commercials. 
But he writes this guide because:
What we found was there is no one-size-fits-all solution because each streaming service carries a different catalog of content, and each gadget has access to different services.
He also notes the fundamental flaws in current TV packages, both from cable and cord-cutting services:
For value, cutting the cord isn’t very cheap if you then subscribe to multiple services to gain access to a diverse set of content. For cable subscribers, paying one bill is less of a hassle than juggling multiple bills. And even after you subscribe to multiple streaming services, there is still some content that you may miss out on because it is available only via cable or satellite, like some TV shows or live sports events. 
But for cable, "all you can eat" gets expensive for those who are not gluttons. The real problem is highlighted in this quote from Kirk Parsons of J.D.Power:
“I would love to have the ability to pick and choose what I want as opposed to having four different services,” Mr. Parsons said. “I think we’ll get there, but right now it’s frustrating for consumers to get what they want.” 
A Post-Bundling future

A ready solution to this chaos is offered in a post I did last year, Post-Bundling -- Packaging Better TV/Video Value Propositions with 20-20 Hindsight. Consider the heart of the problem:
  • Cable packages offer channel bundle discounts for moderate and high numbers of channels, but offer little adaptivity to what you actually watch in a given month.
  • OTT packages are "skinny bundles" of fewer channels.
  • "A la carte" pay per view lets you pay for just the shows you watch, but at one-off prices that are prohibitive if you watch many shows.
  • Why is there no volume discount for just what you watch????
The solution is simple. Post-Bundling lets you have run-of-the-house, and watch whatever you want, then calculates a discounted price for just those shows. The pre-set discount schedule can be comparable to a full or skinny bundle, depending on how much you watch (and how much of that is premium programming). For more, see that post.

A simple step toward the win-win future of FairPay

Readers of this blog know that FairPay takes this idea of post-pricing and marries it to deep customer participation in pricing. It does that in an adaptive process that personalizes pricing to match the individual consumer value received. Doing that takes some sophistication on the part of the seller, since the discount schedule is no longer pre-set, but adapts to additional variables such as how pleased you were with the programs you watched in a given month. But basic post-bundling (with pre-set discount schedules) is a very simple step in the right direction, one that can set the stage for an even more win-win future beyond that. Both steps are good for the customer and good for the TV distributor. It will bring the distributor more profits from more and happier customers -- and give them better understanding of how to please their customers.

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For a full introduction to FairPay see the Overview and the sidebar on How FairPay Works (just to the right, if reading this at FairPayZone.com). There is also a guide to More Details (including links to a video).

Even better, read my highly praised new book: FairPay: Adaptively Win-Win Customer Relationships.

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