IPTV: making the most of the ‘unknown unknowns’?
Posted: March 30, 2010
How does a marketer realise the potential of a product, when that potential isn’t even understood? If it’s to be the success marketers expect, IPTV probably has to learn and teach us all some new rules.
First, what should its role be? It’s potentially a strong retention tool for communication companies but at the moment, it’s unlikely to be that killer hook marketers are looking for. *The penetration of ‘classic’ IPTV is at 472,000 UK subscribers at the end of September 2009.This is a 33% increase on the previous year, but interpretation and take up will widen further as other offers (like Canvas) come in to play. *Source Cesar Bachelet – Senior Analyst, Analysys Mason
Second, how much should you spend on marketing this, and what should you promote? Rather than follow conventional Pay TV, IPTV brands are fast pushing into a new territory that allows consumers to ‘pull down’ content and services in line with their needs.
So, we asked, what are those needs and how should they met by marketers?
We took the classic five-level approach.
The base level is the core benefit – what people really buy – so how should IPTV address that? Today, people say ‘entertainment’. But the sophisticated nature of IPTV will drive a new demand, so the ‘core benefit’ will evolve into individual connectivity or control.
The second level turns that core benefit into a ‘basic product’; a smart box with multiple functions and easy access to rivers of content.
The third level holds the ‘expected product’; a set of attributes and conditions a buyer would normally expect when they purchase the IPTV product.
The fourth level brings in the ‘augmented product’, the bit that exceeds the customer’s expectation. Here, we look at the user’s total consumption system: how he gets and uses IPTV, all the products and the services it provides.
It’s also where the million-dollar question sits: do you promote the service or the content? What brands do consumers interact with while they search and select; the IPTV? The progamme genre? The programme maker or the programme itself? Will the IPTV brand take allow the content to own the relationship?
Consumers will always demand more, intensifying the search for more features and benefits. As the cost of the augmented product increases and is passed on to the consumer, some companies will opt for a basic, lower cost service cost to grab different market segments.
Then the fifth level: the ability to develop ‘potential products’. IPTV has the potential to create products that consumers don’t know they need yet, and that are simply not found in conventional TV space. Sony has already shown that it understands the significance of IPTV and how to leverage its technology.
When we talked to consumers, we found that content, unsurprisingly, remains King: offer a rich library with generous catch up. Next? Fair pricing and ease of installation. Then, emphasise convenience and control: “it’s your TV, all in one place”. Cater for niche as well as popular tastes.
But watch your language. Big messages – “the most, the largest, all your favourite shows” don’t wash well. A complicated product doesn’t need complicated language, and people don’t want to retrain, just to watch the TV.
IPTV is a great product, and potentially a great brand. But it needs to make its offer to consumers based on product and service features, service mix, quality and price. Clarity in this communication would set a new standard for the entire industry.
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