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ThE MaStEr

Cord cutting is biggest challenge
By Robert Briel
Published: November 15, 2010 13.02 Europe/London

CONNECTIONS 2010 – AMSTERDAM. Premium technical support services is one key factor that raises customer satisfaction and reduces churn, said chief analyst Kurt Scherf from Park Associates.

“One of the biggest challenges now is cord cutting, with people turning to over-the-top services from Tivo Premier, Roku or Apple tv,” he said, “But how many people cancel their service?

Until now we found that 0.5% of all broadband households were considering cord cutting. That is 300,000 US households. Tracking the numbers for 2010 we think another there will be a net loss of 200,000 households. So the total number will be 500,000, which out of 170 milliion, is a small number. But they start to shivel away from pay tv dominance.”

However, contrary to conventional wisdom, DirecTV [in the US} is one of the fastest pay tv growers with strong quarterly subscriber net additions. And this with a lack of broadband access and interactivity. “So conventional wisdom is not always true.”

Parks Associates expects key value added services to grow strongly to a worldwide market of $4.6 billion by 2015. This includes parental control, online backup, technical support services and home network configuration.

There is a three-staged evolution of services, first the operators went for bundles, the second stage is all about value added services and in the third stage the development of the connected home.

In stage 3 there will be a convergence of the residential gateway and the set-top box. Also, new services will include home and energy monitoring, health applications and online backup will migrate to ‘cloud media’.
In the home network, all devices will be connected and will see a future of video everywhere.

Initially, there will be basic cable subscription, a “naked TV service” for online video, which [in the US} will include the major networks, including PBS and the major cable networks. The offer could be between16 and 18 core channels selling for $5 per month.

Next here will be VOD 2.0, available anywhere, a prremium service to connected CE devices and the use of personalisation tools to better target both content and advertising.


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