Let’s face it: Cable video, though widely-popular amoun consumers and an integral part of your business, has never been a highly-profitable vertical. And research shows that over the next few years, global cable television revenues are going to drop significantly.
By 2020, for instance, global cable television revenues will drop from 46 percent of the total pay TV market to 40 percent. At this time, total revenue will amount to $81.9 billion. In 2012, by comparison, revenues amounted to $93.8 billion.
So, how can you make sure to maintain your bottom line as this happens?
As revenues from traditional pay television continue to decline, the future of the broadband economy lies in each operator’s ability to maximize the value of the pipeline they drive into customers’ homes. Value, in this sense, means providing customers with the fastest, most reliable connections possible, as well as increased data capacity to handle high quality data transfers.
The formula is simple: By offering premium network services, and offering top of the line connections, broadband providers can justify offering premium rates to customers. No residential broadband customer, after all, would ever want to pay for a rate increase for equal or lesser service. But offer customers a faster package, and customers’ perspective will change.
They will see it in a different light.
“We believe people want a really rich video package, along with a very high quality data service and quality voice service and that the overall value proposition of all three of those products matter,” explained Charter Communications CEO Tom Rutledge in a recent Multichannel article.
In regard to rich video, it’s vital that you think of online video and cable television as a dynamic duo that can be bundled together to create the ideal media package for your customers. This is especially true for millennial consumers, a group which remains glued to their traditional pay TV packages despite openly embracing online video.
“Netflix is our friend,” Rutledge said. “We embrace OTT television because it makes our broadband superiority more clear in the eyes of consumers.”
So, what’s holding broadband providers back from adding more value to their customer pipelines? In many cases, it boils down to a lack of the necessary infrastructure, which stems from a lack of funding.
If your business is in this situation, you may consider switching to a subscription-based billing service, as opposed to a fixed rate. In doing so, you can offer your customers more flexible pricing options which will increase your chances of driving revenues. Then, you can take this added revenue and pump it right back into improving your network.
By taking this route, and providing higher quality data transfers, your customers will continue to rely on your business for their data needs even as you raise prices.
Click here to learn more about how Great Lakes Data Systems can help your business earn more money by outfitting it with a robust, subscription-based billing service.