Answering CSP Content Challenges

By Bill Rockford

Communications service providers (CSPs) face many challenges as they venture into the brave new world of today’s content-driven marketplace. While there are many concerns there are options to address them.

First and foremost on CSPs’ minds is customer retention. We’re not talking about ‘line loss’ numbers here – measuring traditional landlines seems almost irrelevant now. The focus here is keeping the customer’s attention (their wallet) focused primarily in one place. Customers have so many choices for communication services and entertainment today it creates a challenging and exciting marketplace.

In terms of “content” I should clarify that, from my perspective, content is everything from an HD movie to an advertisement to a telephone call. In an increasingly IP- (Internet protocol) based networked world, it all becomes content.

CSPs want to be a one-stop shop for their customers. They would rather not have so many other distribution systems, networks or devices playing the role of a visible intermediary between them and their customers. The more alternative interfaces the customer has to deal with, the greater the chance they might lose them. They may want to move from an aggregator to working directly with a content provider in order to increase their control over the complete delivery of the customer experience.

The reality is the number of devices is not going down, nor will it plateau in the near future. So CSPs are struggling with how to remain relevant today and in the future – to avoid becoming the “dumb pipe.” That said, CSPs still need the ability to deliver the highest speed broadband access offering to their customers so they are able stream any content such as an HD movie or game to any customer at any time. Can they support the speeds required for the newest content offerings over their fixed and mobile access services? CSPs are concerned with issues of quality, reliability and throughput. Carriers such as Qwest, AT&T, and Verizon are investing heavily in their access technologies to address these broadband access issues.

CSPs have two key assets to work from in their quest for success – their customer bases and their brands. With this in mind, their focus on the user experience is most important in order to realize all the other goals. Making it easier for customers to get what they want, when they want it – keeping them engaged. Key components to this user experience include the best customer service and state-of-the-art Web-based e-commerce options.

Providing the best user experience includes organizing and managing their content presented for sale to their customers. For example, if a CSP buys the rights to a movie, the trailer is also provided. How can these content elements be inventoried so that the CSP can use them in a coordinated fashion? The CSP needs to know what content they have, the relationships between content elements, when it was consumed and by whom and for how much. They are asking themselves if they should own the content or get it from an aggregator or both? In addition to deciding whether to own the content, another part of this user experience is the delivery of the content, not just into the house or business, but also across the network. To this end, some CSPs have created or are creating their own content delivery network (CDN) while others use CDNs like Akamai, Limelight or CDNetworks.

Then there is the financial aspect to all of this. Acquiring content directly from publishers, building out a CDN and upgrading their networks accordingly all require significant investment. So some CSPs may opt for partnerships for parts of the chain. Ideally, the CSP billing the customer is best – keep the bundle, keep the connection to the customer – while the CSP would have to share some of that money collected, they remain front and center to the customer. Content or things that are consumed utilizing their core assets seem to be the most logical elements to partner for.

Integrating multiple partners’ billing inputs becomes the next challenge. Billing errors do not create a good customer experience, so ensuring that what is landing on a bill is accurate is very important. The choice becomes integrating into existing billing streams through upfront validation of transactions or subscriptions or possibly creating a new billing flow entirely using new systems and tools.

While ensuring the customer is billed accurately, the other aspect to the financials is making sure the money being received from or paid to partners is correct based on the deal that was put together. They want to know how they can eliminate fallout from their content provider partnership agreements and errors in billing arising from discrepancies in tracking partner provided services. This gets into royalties questions. Do they have to compensate artists for performance royalties and if so, how do they do that? Percent commissions come into play here and CSPs need some type of proof of consumption to validate that they are getting and/or paying the right commission on that content.

It all comes down to leveraging their assets efficiently, building and managing their network effectively and creating the right partnerships, all in the right combination to maximize return. In order to do all of this successfully, CSPs need to fully understand the impact of offering new content. They need to become experts in partnership management. There are options available to CSPs to track, integrate and manage all of the content, network access services and devices discussed above. They can purchase state-of the-art software systems to use in-house, which can come with a heavy price tag. They can outsource these jobs to third party providers or they can utilize an on-demand/software-as-a-service solution. There are pros and cons to each choice and numerous factors to take into consideration that are relevant to each CSP. Selecting the right options involves having a clear picture of the organization’s desired direction in terms of acquisition or outsourcing, time horizons and finances.

Bill Rockford, engagement manager with Vertek Corp., has more than seven years of telecommunications industry experience across many aspects ranging from quality assurance and service delivery to financial and revenue assurance. Within Vertek, Bill has been responsible for delivering results to clients ranging from multi-million dollar cost savings and avoidance initiatives to process optimization programs affecting clients global customers. He can be reached at brockford@vertek.com.