Service Providers’ ROI for Multi-Screens OTT/TVE

Service providers are naturally hesitant to talk about how they are charging their subscribers more so we can’t go into specifics, but I can provide some rough guidance. By way of example, we recently completed a business case for an SP with 250,000 subscribers that factored in low, single-digit “take rate” for package upgrades from standard to premium with 2 to 3 pay-per-view movies per month. We used conservative estimates for incremental ad revenue and assumed low, single-digit customer retention improvements.  This business case, which we developed in conjunction with the SP, yields positive return on investment (ROI) north of $1 million in the first year (post go-live) with breakeven or payback time in less than a year. It also included year-over-year likely growth with very little additional internal investment planned. In other words, the ROI components include increased ARPU, increased ad revenue, “saved customers,” bundle upgrades and more VOD eyeballs.  As you can see, Azuki is helping SPs to play both defensive and offensive strategies to not only protect their territory and premium customers, but also grow their market leadership.

This is an excerpt from my conversation with David Dines, Principal Analyst, ACG Reports.  
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