The operator battle for the premium subscriber - is multi-play an answer?

Pressures on video service operators abound – rising content costs, radical changes in consumption habits, and direct relationships between content owners and consumers. The challenge we are asked about most these days is how to profit in the video service and even its viability as a standalone business. I believe enlightened operators are able to profit from the changes in the industry, first and foremost by embracing the changing habits of consumers. Part of the answer lies in having the right bundle.


As cordcutters and cord-nevers increase, the focus is now of course broadband (supported by WiFi). One could see it as a series of races. Race number one is the ‘need for speed’: get fast enough to satisfy the multi-screen, multi-use home. Cisco predict that 80% of all IP traffic will be video by 2019. The picture varies but often in developed countries this race is a mature one, in cities at least. Many countries including the UK still leave more remote towns and businesses out in the cold broadband-wise - but more about that another day... So, in cities the ongoing network upgrades are needed, and they may slow churn but they aren’t by themselves a top reason to buy, at least in the cities.


Premium broadband offers are of course known to be high-margin at present -but race number two is to avoid fast broadband becoming a low-value commodity, and add value to it with intelligent content bundling including OTT.

The core reason is, studies show that the more services you offer, the less likely the home is to churn (especially if you maximise brand awareness ). Mobile churn rates are typically 30%, but any dual play home offer cuts that in half, and a quad-play offer almost halves it again to 8%.

Swisscom, for example, saw their single-product subscriber base drop by 20% over 2013 and 14, while their bundled subscribers grew by around 30%.
Bundled subscriptions in EMEA for things like Amazon Prime Instant, SkyGo and other TV-everywhere services will grow from around 12 to 30+ million in the period 2013-18 according to consultants IHS.


Quad-play and beyond is easier to achieve when you have more options: when the choices include offers like home monitoring or energy management. Operators with multi-play options appear more secure medium-term, so race number three is multi-play.

The content bundle probably needs to include significant OTT choices in some way but an overall winning formula for a more established operator has to be: a compelling pricing structure, decent broadband speed, and as many additional plays as you can.

Multiplay offers clearly add cost and business complexity, not least in billing and back-office systems – so the package needs a ‘red thread’ through it as an overall home offer, one which hopefully differentiates.

Sustainable multiplay offers mean intelligent acquisitions, strong partners and most of all, a clear vision of your end-game: what is the theme to your multiplay offer? But, it seems clear that premium broadband and multi-play are the answer to selling connectivity and entertainment services.