The good news for mobile network operators (MNOs) is that bundled media services do appear to make people spend more on their mobile or broadband subscriptions. Just over 40% of respondents across all five countries reported that this led to extra fees on their carrier plan. Roughly the same number (43%) also said having those bundled media services made them stickier as customers, and more likely to keep subscribing to their existing telecoms provider. Only 5% said that the bundle had no impact on either their loyalty or their spending.
Offering “try before you buy” and free limited-time subscriptions does make a difference when it comes to enticing new customers onto carrier networks. Almost half (46%) of all the people polled by Ovum indicated they were willing to pay for premium media services if they were offered a discount or extended free trial, and over a quarter (27%) said they would switch to an alternative provider to benefit from those sort of offers.
The most common reason cited for not subscribing to any online video service rests on current free to air TV services being good enough to meet requirements. Comparatively few people reported that they could not afford the subscription fee or that they did not watch enough TV to warrant subscribing to an additional source of content.
Price sensitivity, not the only subscription driver
And in some cases, it does appear to be convenience rather than the price which is most likely to influence any decision to sign up. That is perhaps surprising in markets such as India, the Philippines and Thailand, which are usually very price-sensitive due to low per capita income levels. In India, for example, downward price pressure from consumers in 2019 prompted Netflix to cut its subscriptions fees to as little US$4 in a bid to attract more subscribers.
There are also indications that ease of billing plays a much more significant role in a customer’s decision to subscribe to an OTT service than might be imagined. When asked what their reasons for purchasing telco plans with bundled OTT media services, around 50% cited the ease of paying for a service via their telephone or broadband bill or combining it in a single monthly fee, significantly more than did so because the media service was offered free or at a discount (18%).
What is more, 9% of Filipinos said not having the right payment mechanism prevented them from subscribing to any online video services (compared to just 4% in Australia and India). That is a significant problem in a country whose high levels of smartphone penetration make it an attractive market for OTT providers looking to deliver paid video content to its 109m consumers (see The end of the Filipino telco duopoly will open new doors for OTT video service providers).
More than 50% of respondents still said they thought the average subscription price for OTT media was too expensive, however. That is particularly true in Singapore (63%, where the average price is US$8.95) and India (59%, US$4) ahead of Thailand (45%, US$7.27), the Philippines (51%, US$4.89) and Australia (54%, US$8.26).
But the findings also suggest that the introduction of new revenue models to drive down those prices will help telcos and content providers reach new audiences. The majority of consumers in four of the countries surveyed indicated they were open to accepting ads to pay less or nothing for OTT services (71% on aggregate) for example, with the one exception of Australia where the figure drops to 49%.
A third of Australians (34%) said they would not be willing to accept ads, and 47% said they would not buy one-time passes for short-term access to specific content in order to avoid paying a full subscription (ahead of 41% in Singapore). And on aggregate across all five countries, 54% are willing to share personal information which advertisers can use either conditionally or for the targeted advertising purposes.
Video rules bundled subscription services
While telcos and OTT players offer a broad range of content services across the five markets, it is the video which makes up the majority of bundled subscriptions ahead of online music and gaming platforms. That is more so in Australia where content is often integrated into carrier set-top boxes featuring the likes of Foxtel Now, Netflix and Stan (see Multi-device Strategy Key to Australian Video Streaming Market).
Most (69%) consumers were still subscribers to one or more paid online video services, however, with the number signed up to more than one particularly high in India (56%) and the other two developing countries compared to the regional average (25%) and just 10% in Australia and Singapore. With seven live telco bundling partnerships currently, India has the highest number of OTT bundles available via telcos among the five countries surveyed. Competition has markedly intensified in the last few years, with local content providers like Hotstar, Sony LIV, Zee5 and Voot competing with global brands like Amazon Prime Video and Netflix (see Filippo Giachi’s blog India’s video streaming wars set for an interesting inflexion point here).
Consumers in Australia (73%) and Singapore (54%) are least likely to have premium media services bundled with the fixed or mobile telecoms subscription, perhaps because of the smaller number of such services are actually available in these locations. On aggregate, the most common reason for subscribing to more than one media service was to meet the demands of different family members, though 41% of the consumers surveyed also reported there was no single platform that delivered all the content they wanted. Almost the same number (40%) also reported that they could get multiple video services bundled within a package by signing up to a single carrier or broadband provider.
A small but significant portion of consumers polled (7%) blamed a previous negative experience for not purchasing a telco-bundled media service. Issues led these with billing (3.5%), activation (2%) and poor support (1.5%) – all customer experience metrics that can be improved through better integration of carrier and OTT provider back end systems.
Competition for OTT subscribers is growing progressively more intense across India, the Philippines, Singapore, Australia, and Thailand. But while content is always likely to remain, king, the findings of the Ovum/Amdocs survey also suggests that partnering multiple telcos and MNOs to expand its distribution whilst having the flexibility to support as many different billing options and revenue models as subscribers want or need will also pay dividends for OTT providers and carriers alike in the long run.