Proactive subscriber management can help improve key performance indicators, leading to lower churn, and the ability to break into new markets, according to a new white paper.
Subscriber Management: The Driving Force Behind Pay-TV Profitability – available from the Broadband TV News website and supported by PayWizard – says effective use of a subscriber management system can help drive prospect acquisition campaigns, including analysis-based recommendations for targeted advertising.
It gives the example of an operator with 100,000 subscribers paying $10 per month with 25,000 new subscribers joining each year and annual churn of 20%, its annual revenues will equate to $12.15 million in year 1 increasing to just $12.95 million in 5 years – a total of $62.96 million over the 5-year period. However, if an operator was to improve acquisition by just 5% and reduce churn by the same 5% through effective marketing to their subscriber base, then the equivalent revenues are $12.56 million in year 1 growing to $15.84 million in year 5 – a total of $71.65 million.
In the UK, Sky with an an average pay-TV ARPU of approximately £400, spends roughly £390 in acquiring a new customer on a minimum 12-month contract. With 10 million customers – and a relatively low churn rate of 10%, Sky still needs to win an additional 1 million customers a year to keep growing.