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Cable Technology Feature Article

December 10, 2013

Pay-TV Providers Ignore Content Discovery Features at their Own Peril

By Tara Seals, TMCnet Contributor

Research shows that good content discovery and recommendation features will be critical for increasing viewer engagement with video content going forward—especially digital content. And indeed, 41 percent of U.S. broadband households already receive personalized video viewing recommendations from at least one source. Typically, that source is one of two online video services: Netflix or Hulu (News - Alert), while pay-TV providers languish behind.

As the line between traditional and Web content delivery blurs, multiplatform TV recommendations engines are growing in popularity to provide viewers with real-time intelligent navigation/search, and content recommendations based on subscriber viewing patterns.

"Consumers report high awareness of recommendation features from online video services, including 59 percent of Hulu Plus customers and 50 percent of Amazon Prime customers," said John Barrett, director of consumer analytics at Parks Associates (News - Alert). "Fewer viewers are aware of personalized recommendations from their pay-TV providers, which is not surprising since U.S. pay-TV providers are only beginning to launch recommendation services.”

In fact, only 15 percent of AT&T (News - Alert) U-verse and 14 percent of Cablevision subscribers report receiving personalized recommendations, the highest among operators. And that’s an ultimately a big problem for the sector.

Research from Veveo, a provider of semantic search technology, noted that nearly one-half of consumers who receive personalized recommendations are willing to share their viewing history with friends or family in order to improve the recommendations— offering big upsides to pay-TV providers that effectively implement such functionality. And, three-quarters of respondents said they preferred to have better search solutions offered to them by their service provider—with 70 percent saying they would switch providers for better discovery options. A full 60 percent said they would use voice-controlled search on their TVs if their service providers offered it.

But existing  pay-TV usability is falling far short of consumer expectations as well as the state of discovery in the Web, mobile and social media arenas. The majority of pay-TV users perceive content discovery in television to be “inadequate for their needs.”

More than 85 percent of pay-TV subscribers in the survey noted that they turn off the TV without finding something to watch at least some of the time. And this was despite over three-fifths spending more than 10 minutes a day searching for content, and more than 10 percent feeling that they spend either a “considerable” amount of time or a “lot” of time looking for content.

According to Global Industry Analysts, growing competition is necessitating pay-TV and broadcasters to provide competitively differentiated immersive TV experiences by delivering personalized interactive services. But in addition to taking a hit on customer loyalty and satisfaction, pay-TV operators are also missing out on a big revenue opportunity by not implementing effective content discovery and recommendation engines.

The firm found that as m-commerce balloons as a worldwide industry, the new era of discovery commerce is emerging to present strong market opportunities for content discovery engines. As online retailers compete to engage consumers, content target marketing strategy is gaining in importance to ensure easy discovery of brands and products. Growth in the market in the coming years is also expected from the finance and insurance sector, as companies increasingly utilize content discovery platforms for recommending investment options and plans to users.

Edited by Cassandra Tucker

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