Understanding Consumer Preferences for IPTV

Most industry analysts believe that before consumers will jump on the IPTV bandwagon, service providers must deliver an experience far more personalized than traditional broadcast, cable or satellite television. But appealing to a diverse set of viewing habits from an increasingly distracted online population isn’t easy. Most service providers are shifting focus toward a deeper understanding of segmented consumer preferences, which are growing more complex and varied than ever before.

Innovations like the digital video recorder (DVR) have enabled significant changes in customer viewing habits—sometimes referred to as “time-shifting.” And in the resulting on-demand world, the notion of channel tiers may be obsolete. Just as IPTV markets are not alike, the same is true for consumer expectations.

CEOs from Verizon, Disney, Time Warner Cable and NTT told audiences at the recent TelecomNext trade show that the future of communications and entertainment truly lies in the hands of consumers—who want more choices in the services that they subscribe to, more choices in content itself, as well as more choices in which devices are used to access them.

“We’re seeing a great shift in how consumers spend money, and our business models need to be flexible,” said Robert Iger, CEO of Disney. “It used to be said that content is king, but now, the consumer is king.”

Let’s consider the implications of consumer-centricity and the potential for IPTV service innovation by challenging some of the traditional, widely-held beliefs about consumers’ television viewing experiences. Savvy providers are already considering these issues, and as a result are better able to align the viewing experience with consumer expectations.

Television programming is scheduled and linear. Granted, some basic assumptions about competitive parity may be valid, such as the view that launching IPTV without HD programming or a DVR capability may be difficult in a mature market. However, several years of IPTV experimentation have proven that some consumers want the linear structure, some want to choose their channel lineup, and others don’t want channels at all.

Consumers prefer the cable TV remote control format. The channel “favorites” button was a step in the right direction, but like most remote design decisions, it’s implemented from a set-top device orientation, not a consumer orientation. Consumers want the “me” button that remembers their eclectic, and sometimes unique, content programming choices—in other words, one that remembers the content theme or consumer lifestyle preferences. Some want a personalized “my” electronic program guide, not merely the default electronic program guide (EPG).

Content is best chosen by “professional” programmers. Most consumers in the U.S. market probably know that one of the popular TV programs is called Desperate Housewives. What they don’t know is that the program creators were repeatedly turned down when they sought a network to pilot the program. My point: the media “experts” don’t know everything. The opportunity for consumers to co-create and co-refer content with their peers is essentially untapped.

Customers will tolerate unsophisticated support. Let’s be candid. The most common cable TV set-top box diagnostic routine leaves much to be desired. When we ask a cable subscriber to remove the electrical power plug, wait sixty seconds, and then reinsert the plug, does this present the impression of a sophisticated service provider? I think not. Do consumers prefer a technician visit when this “dumb diagnostic” routine fails to solve the problem? I doubt it. Then why not consider service quality problem resolution an integral part of the service offering? Moreover, when providers offer comprehensive self-help diagnostics, they can positively improve an otherwise prolonged and negative consumer experience.

There are, of course, other issues to consider. But regardless of which IPTV launch strategy a broadband service provider chooses, there will always be one constant—the requirement to craft a compelling consumer experience. I believe that we can make that first IPTV impression truly remarkable—if we are in-tune with the consumer opinions, preferences and tastes in anytime, anywhere, digital entertainment delivery.

David H. Deans is the principal consultant of Deans & Associates, a telecom sector market analysis and consulting firm. He has authored numerous published articles on technology applications, public policy, customer care and organizational development.