VISION PAPER Pay-TV on every device and any platform How next generation Subscriber Management Systems are solving the major challenges facing pay-tv operators, MSOs and VOD service providers in the TV Everywhere landscape
The evolution of the pay-tv market The explosion of video-enabled, internet connected devices means that pay-tv is going through a significant evolution. Consumers across the globe are exercising more spending power over a wider range of content, and according to data from ABI Research, worldwide pay- TV subscribers reached 903 million by the end of 2013, generating service revenues of US$245 billion. Across the world monopolies are also ending, and we are seeing national and international rivals appear with competitive offerings across mainstream and specialist content. Subscription and on-demand services are battling for their market share with a mix of great content, customer experience and value-added services. On top of this, the explosion of mobile video and gaming has led to a whole host of new market entrants who are keen to exploit new untapped consumers whilst driving down operational cost and risk. As a result, the pay-tv market, in all its forms, is developing rapidly. And it s not just changing for operators - subscribers are faced with more options than ever before. Although this evolution brings great opportunity, with it arises challenge, and today, there are three distinct challenges operators are facing in the new pay-tv landscape: Pay-TV everywhere The first challenge operators face in today s pay-tv market is extending services across multiple devices and allowing consumers to access and pay for the content they want, anytime, and anywhere. With the number of videoenabled mobile devices exceeding the number of traditional television screens, operators need to offer customers a continuous service across devices as they move between different set-top boxes, smart TVs, games consoles, tablets and smartphones. Platform interoperability Alongside the burgeoning array of videoenabled devices, the pay-tv industry is also seeking platform interoperability. But integrating various delivery and payment platforms to ensure content flows across owned and partner channels in a seamless and chargeable fashion is not an easy feat. With the rise of OTT, the route between content provider and consumer is more complex than ever before, and interoperability is a major hurdle for operators who are keen to reach the widest possible audience. Payment Anywhere Although solving the challenges of pay-tv Everywhere and platform interoperability are considerable, streamlining the payment process is also becoming an increasingly critical task. As pay-tv innovators overcome the previous two challenges and expand across geographic boundaries, they must contend with taking payments in 186 international currencies, from 4 major global credit cards and dozens of e-wallets, as well as the support for local payments. We are even seeing new mobile-banking systems growing in popularity across Africa and Asia, which companies must also begin to cater for. Failure to properly address payment processing can fatally stall growth, and even those with the most innovative pay-tv service will suffer. This vision paper examines how the use of a next generation Subscriber Management System (SMS) can help pay-tv providers solve these challenges and build a foundation for the delivery of advanced TV Everywhere services.
The evolution to next generation SMS platforms According to estimates from ABI Research, the global pay-tv market is expected to grow to 1.1 billion subscribers with $320.3 billion in service revenue by 2019. Just a decade ago this buoyant market was dominated by a handful of players, but today hundreds of service providers are battling for their market share, offering viewers a wide range of their favourite content - anything from popular TV shows and premium movies to specialist sporting channels. Every pay-tv service, irrespective of whether it delivers content via cable, satellite, DTT, IP or even a combination of each, still needs consumer content, service delivery, billing and payment collection. And although these four steps are in fact broken up into dozens of more intermediary processes, at the heart of this web is a SMS, which is absolutely critical for service delivery. In the early days, pay-tv operators tended to build their own SMSs. As they often owned end-to-end infrastructure, and few alternatives existed, the choice made sense. As a result, operators would invest considerable capital expenditure (CAPEX) to create bespoke software applications or bolt together existing infrastructure creating inefficient, overloaded and non-communicative systems. These platforms would require continual updates in line with new technology advancements, product changes and subscriber growth. But as SMSs grew ever more complex to develop and required extensive and ongoing maintenance, pay-tv operators soon started to feel the pain of acting as software developers. The early 1990s saw the widespread adoption of IP based service delivery, and as a result operators started to turn to specialist SMS providers in much the same way that large enterprises stopped building their own transaction management systems and switched to using Oracle, Amdocs and Microsoft. The rationale behind this was simple; let us rely on experts to develop and maintain these systems whilst we focus on our core business activities. Today, the most advanced SMS will use private cloud technology. Although an often misused term, in the context of SMS this means software and services deployed on private servers within a highly resilient data centre that can scale in terms of capacity and performance as demands change. Private cloud technology allows operators to move away from a CAPEX model to an operating expenditure (OPEX) equivalent, scaling systems in line with the number of subscribers they handle. On top of just a software platform, the modern SMS provider will also offer people and process expertise, providing interoperability and support, as well as extended services across more devices. Together, these factors offer a foundation for operators who are keen to innovate and break into new markets. If the history of the pay-tv market has shown us anything, the next decade promises to be even more revolutionary than the last. As the availability of high speed fixed and mobile broadband increases, the prospect of even more choice and service flexibility requires operators to develop products that span a more challenging technical landscape. Risks also rise as technical changes develop both up and downstream, and these will significantly impact upon pay- TV providers if their core SMS is not designed to cope with the dynamic market. Ultimately, a TV service that fails to deliver as advertised risks angry subscribers clicking on the dreaded unsubscribe or cancel subscription button. Worldwide Pay-TV Service Subscribers and Revenues 903 million $245billion by end of 2013 1.1 billion $320.3billion by end of 2019
Addressing the challenges of pay-tv on any device Many pay-tv operators are exploring B2C and multi-device strategies that enable consumers to watch on demand content with more freedom. As consumer viewing habits have dramatically changed, today s always on viewer is watching video content across a huge number of devices, ranging from the traditional big screen TV to the pocket sized smartphone. As a result, operators are finally recognising that significant changes need to be made to delivery technology and subscriber management as consumers watch the content they want, between the devices they choose. An example of this in action would be a traditional video on demand (VOD) service that is delivered via a cable provider, making a selection of children s titles available for download onto a tablet app to help parents entertain travelling kids. A service like this will need to be tailored for the constraints of the tablet form factor, which could include a new Electronic Program Guide (EPG), Digital Rights Management (DRM) and Conditional Access (CA) components. Potentially the service could be resold by mobile telephony operators to its subscriber base, which would then require integration between both billing systems. Although this example could be considered a multi-device strategy, the move to support new devices provides a catalyst for expanded business opportunities. But delivering a true multi-device service has proven difficult. One of the major inhibitors is navigating the complexity of the different screens. Because of the significant differences between devices from Apple, Google, Microsoft, Samsung, Nokia and a whole host of other vendors, even signing up new subscribers has become a major challenge. In a world with half a dozen potential access devices, allowing subscribers to select and then enforce access policies in line with billing and payment is a complex problem to solve. The heart of a successful multi-device strategy requires streamlined access for consumers across any device used to sign up for services, validate billing and taking payment. In many cases, the first interaction a consumer will have with the pay-tv brand may well be within the application downloaded from an app store or via a portal viewed from a games console store front. This process requires an understanding of the device profile, limitations and user authentication practices, as well as the ability to validate billing and take payment across a diverse range of debit, credit and online payment services. Pay-TV services are increasingly spanning international borders which means that international payment capability is becoming a must have. Unfortunately the ecosystems these devices live within are constantly evolving, so the SMS has to be able to remain current, which is a major advantage of service offerings like PayWizard that are continually updated to the operating environment of both the pay-tv providers and the consumer device.
PayWizard worked closely with Racing UK to help meet its multi-device strategy and expand its innovative service Racing UK is Britain s premier horseracing channel, broadcasting live racing from 33 of the best courses in the UK, where 90% of coverage is exclusive to the channel. Racing UK launched in 2004 as a subscription channel available to Sky Digital Satellite (DSAT) homes. Today the service is available through Sky, Virgin Media, Freeview and IPTV, as well as via online, mobile and business premises. With more than 43,000 residential subscribers, Racing UK is also shown in 3,500 clubs and pubs in the UK, and is continuing to grow each year. Racing UK wanted to implement a TV Everywhere strategy that would take advantage of the monetisation opportunities presented by multiple devices. The broadcaster wanted to make the channel available to subscribers across any and all commercially viable platforms without creating significant overheads in the management of subscribers in databases. Racing UK selected PayWizard to develop Racing UK Anywhere. It chose PayWizard to provide endto-end subscriber management and consolidated billing across DSAT, web, ios, Android and hybrid Freeview HD set top box, enabling the service to be available to over two million additional households. Not only does PayWizard Enterprise SMS allow viewers to subscribe to Racing UK on an annual or monthly subscription but also across a selection of devices using a tiered payment model depending on how many devices consumers want accessibility across. The SMS also ties into the TV Everywhere experience by allowing customers to update preferences at any time and view customisable racecards, an extensive database of information, news, features, columnists and betting options. This level of customisation is simplified for the user by a single-sign-on capability and all costs are dynamically calculated so that consumers can see what they get and what it costs. PayWizard Enterprise provides Racing UK with a single view of the customer in real time and allows the channel to manage the types of platform the viewer will be entitled to consume content, and provides Racing UK with sophisticated marketing functions which can reduce churn and win back customers. By upgrading its SMS with PayWizard, Racing UK can manage the specific platforms on which viewers will be entitled to consume content, future-proofing the company as new devices come to market. In response to consumer demand and trends for access to content across a number of different platforms, we have launched on multiple platforms and screens. But we found that having different systems for multiple devices and multiple relationships meant that gathering payments became problematic, and we therefore required a one account approach. Upgrading with PayWizard was seamless and provides exactly what we need to enable a smooth and consistent consumer experience across all screens. Clive Cottrell, Marketing Director Racing UK
Addressing the challenges of pay-tv on any platform In common with every other business, pay-tv operators always strive to get their product out to the widest possible paying audience. A platform interoperability strategy allows pay-tv operators to combine internal and external infrastructure to deliver pay-tv services across as many distribution methods as possible. For example, BT Sport, a subscription-based sports TV service in the UK has excellent platform interoperability as it can be viewed through the broadband internet services of BT, via cable TV services from Virgin Media, and the satellite TV service from Sky. As is common with most B2C transactions, consumers tend to want more whilst paying the same, or in some cases, paying even less. For both incumbents and new entrants into the market, this means streamlining operational processes and enabling services to potentially use all available delivery methods in order to reach the widest audience possible. Traditionally, major inhibitors to platform interoperability revolved around the complex nature of the core subscriber management system built in-house, over many years, to very specific criteria. For example, enabling pay TV content from one provider to be viewed across a VOD platform from another might require changes to CA systems, the sharing of subscriber information between CRM systems, as well as changes to passwords and billing processes across two or more management systems. These technical and process challenges pose a significant cost investment for both organisations involved. A specialist SMS provider like PayWizard is set up to deal with these types of challenges. Its wealth of knowledge and experience means it has already encountered a combination of technologies, data exchange standards, CA vendors and APIs. In many instances, not only does PayWizard act as a bridge between different platforms to perform the transformational steps necessary, it also enables elements such as subscriber signup, billing and payment processing to be agnostic of underlying technology restrictions. When these services are delivered as a monthly charge per subscriber, the cost becomes quantifiable for both sides of these mutually beneficial agreements. Pay TV Platforms Cable/MSO s VOD Service Providers
PayWizard s successful project with BT Sport is a great example of how platform interoperability enables new pay TV services to become accessible to the market. BT is one of the world s leading communications services companies serving customers in the UK and in more than 170 countries worldwide. BT provides its customers with fixedline, broadband, mobile, TV, and networked IT products and services. In August 2013, BT TV launched a set of dedicated sports channels including live Premier League football games, Aviva Premiership rugby union matches and a deal with the WTA to broadcast women s tennis. BT TV required a middleware solution to enable the BT Sport channels to be delivered via the BSkyB s digital satellite (DSAT) platform. The interface between BT s BSS and OSS systems and the Sky/Cisco CA system presented a significant business risk due to the short time-scale for planning, delivery, and the lack of experience of broadcast technology within BT. Thus, there was a need for a proven, reliable platform with the flexibility to offer an additional interface with the Sky/Cisco CA system. BT TV selected PayWizard s enterprise class software to provide platform authentication for the BT Sport channels, and to connect BT s internal subscriber management system to Sky s conditional access system. The service has over 2 million customers* to date and this interoperability has been critical in enabling Sky customers around the UK and Ireland to subscribe to the exclusive new channels and view them through their existing set top boxes. The PayWizard platform allows BT agents to manage subscribers on the Sky DSAT platform and to enable/disable viewing entitlements. PayWizard also provides around the clock support for BT with a 24/7 help desk. *Source: BT Sport channels attract 2 million customers http://www.theguardian.com/business/2013/oct/31/ bt-sport-channels-attract-2-million-customers Extending audience reach without compromising content security is one of the biggest challenges facing premium content broadcasters today. As a sports broadcaster with high value content like premier league football and rugby union this is especially true. We have chosen PayWizard to help us overcome this challenge. Its robust platform and extensive experience in the media industry make it an ideal partner for such an important part of BT Sport. Marc Watson, CEO BT TV
Simplifying the global payment process If operators do successfully solve the challenges of pay-tv Everywhere and platform interoperability, they still need to overcome significant issues surrounding payment validation and processing for a wider geographic and demographic audience. For example, a pay-tv service broadcasting from the ASTRA 1M satellite casts a footprint over Europe and North Africa covering roughly 42 countries and 26 currencies from Morocco in the south, to Norway in the north. While the Nordic market has high credit card adoption, almost universal broadband and a mature e-commerce mind-set, Morocco is a vibrant economy with rapidly growing pay-tv Average Revenue per User (ARPU) and popular smartphone based banking systems. In this synthetic example, a pay-tv service that only accepted Visa and MasterCard credit card payments in Euros could be excluding a wide segment of its potential audiences. Around the world there are a number of other stark differences in taking payments. In many parts of Asia, for example, using vouchers for over the counter cash payments for telephone services is incredibly popular. If a pay-tv operator wanted to offer this payment option, they would need to interface with several highly bespoke Point of Sale (PoS) terminal service providers across the region in order to make this happen. The list of permutations around possible payment options seems endless and is further complicated by reconciling charges against currency fluctuations and local value added and consumption taxes. PayWizard currently offers a comprehensive range of payment solutions, supporting 300 payment methods in 100 currencies worldwide. These include pre and post pay models, credit and debit card processing, direct debits, and local payment options such as Ideal card. In recent years, PayWizard has added mobile phone operator integration, cash economy options powered via vouchers, and white-label and branded e-wallets such as PayPal. The end customer, who is signing up to a pay- TV service on a tablet, smart TV app or web browser, has no idea of this complexity, as it is all hidden away in the back-end. The user interface simply asks the comfortable validation questions that are associated with each available payment method, and at the click of a button, the customer is exposed to a world of content. Services and payments including:
PayWizard provided NBCUniversal with a full, end-to-end solution for its VOD service PictureBox, allowing customers to make payments anywhere Owned by Comcast Corporation, NBCUniversal is one of the world s leading media and entertainment companies. Its PictureBox Video on Demand movie service offers a selection of movies, from a variety of major film studios, for a monthly subscription. Available through several TV broadcast platform partners or via the internet using the PictureBox Player, PayWizard helps PictureBox collect payments from subscribers in the UK and Europe. By supplying its Enterprise SMS, NBCUniversal has access to PayWizard s full suite of payment options and benefits from a complete solution that is seamlessly integrates for users via PC, Mac, Apple and Google tablet and smartphones, Samsung Smart TV, Sony and Microsoft games consoles, and Blu-Ray Player. PayWizard supplied UK broadcaster ITV with a white-labelled e-wallet, allowing it to monetise VOD content on its ITV Player To meet its revenue generating strategy, ITV, the UK s largest commercial television network, introduced a payments system to monetise premium content via its ITV Player service. PayWizard supplied the broadcaster with a full end-to-end SMS, including subscriber management, billing and operations support. To support payments for TVOD and SVOD on the ITV Player, PayWizard provided an ITV branded e-wallet solution that lets customers control their entire customer account. This includes registration, billing, transaction history, as well as adding and managing payment options. The system is transparent across multiple devices, platforms and territories, and includes single sign-on while meeting critical PCI DSS compliance. When we launched the new ITV Player it was imperative that we found a payment partner that understood our needs and met the technical, commercial and operational requirements of our business. It was clear from PayWizard s proven ability to provide a comprehensive suite of products aimed at monetizing digital content and supporting customer purchases, that they could do exactly that. James Micklethwait, Online Product Director, ITV PayWizard s e-wallet solution also enabled NHK to take subscription payments for its OTT service JSTV-i from Japanese nationals around the world Nippon Hōsō Kyōkai (NHK) is Japan s national public broadcasting organization, funded by licence fee. PayWizard has provided a secure, PCI DSS compliant system to enable NHK to take subscription payments from Japanese nationals across Europe in return for access to their OTT service, JSTV-i. The branded MyPayWizard e-wallet supports GBP, Euros and USD, and can bring together regular subscriptions, vouchers, flexible payment types and single click purchases in a secure environment.
Exciting times ahead for the pay-tv industry As seen by the arrival of exciting new services such as Hulu and Netflix, the challenges faced by the pay-tv sector are not insurmountable and offer rewards for the services that embrace innovative ways of dealing with the rise of new platforms, devices and business models. It is clear that operators across the landscape are embracing a TV Everywhere vision and behind the scenes are evaluating how to align subscriber provisioning, billing and payment to match an increasingly diverse audience profile. The rise of next generation SMS and supporting services that take advantage of private cloud technology matches the need to switch from a CAPEX to an OPEX model fostered by an increasingly competitive landscape. It is an exciting market where small niche players and multinational goliaths struggle to remain agile and responsive to consumers with more choice than at any point in history. PayWizard is a subject matter expert within subscriber management systems and services. Its two decade journey has built a team of technical, process and business experts that focus solely on the media and TV landscape to ensure that it meets the needs of all of its clients. The next decade promises to unlock massive potential for innovation, and pay-tv operators need to focus on this business opportunity whilst trusting in the skill of proven experts to meet the subscriber management challenges that they are likely to face. About PayWizard We deliver next generation subscriber management and billing solutions for today s multiplatform world. Based on our cloud based enterprise class software, we provide multiscreen subscriber management, pay-tv platform interoperability and a unique array of best of breed payment services to enable pay-tv operators and other media companies to truly monetize the TV everywhere experience. With 15 billion video-enabled devices set to be in the global marketplace by 2020, it is becoming a strategic imperative for pay-tv operators to make their content available across multiple devices. But many are facing the challenges of enhancing their TV Everywhere services whilst creating compelling experiences that embrace new routes to market. Our comprehensive set of products and services address these commercial challenges and ensure pay-tv operators remain successful in today s highly competitive TV landscape. Each year we enable more than $400million in pay-tv revenues for our global client base which includes leading media companies BT TV, NBCUniversal, ITV and Virgin Media. @PayWizardplc linkedin.com/company/paywizard-plc plus.google.com/+paywizardplc www.paywizard.com