With more 22 million customers receiving video programming from providers other than cable operators, customer retention is of paramount importance to the industry. At the same time, the expanding channel universe is making it increasingly difficult for subscribers to sift through shows that interest them.
Software company MyDTV, through its personal navigation system called TV Agent, helped Time Warner Cable Desert Cities, Calif. system reduce churn, while eliciting a positive consumer response about the product's performance as a recommendation engine. For those performances, MyDTV has earned a second-place award in CTAM's Customer Retention Case Study Competition for programmer/industry suppliers.
"In the last decade the industry invested billions in capital expenditures to try to reduce the 40 percent digital-churn rate," said MyDTV president and founder Gil Dudkiewicz. "We are delighted CTAM recognizes the impact our personal navigation system has on reducing churn without increasing cable operators' capex."
For the trial, MyDTV activated TV Agent in 589 households from February through July 2002. MyDTV sent participants a reference guide to help them enter the preferred programming topics and keywords that enable TV agent to scan to the up-to-the-minute programming content. Capturing metadata-type information from programmers on topics or people contained in their programs, TV Agent, in turn, alerted subscribers via an on-screen crawl to shows they may be interested in.
To gauge TV Agent's performance, the company retained Larchmont, N.Y.-based researcher Horowitz Associates to measure the usage of TV Agent to find and view programming; evaluate its features, categories and coverage; its impact on pay-per-view; and customers' willingness to pay for the service.
In order to calculate TV Agent's impact on subscriber retention, MyDTV measured churn rates among the 589 households and compared them versus Desert Cities' subscriber base of 20,000 households. Among TV-Agent households, churn rates from May, June and July 2002 improved 35.4%.
The examination also found an almost 40% amelioration in terms of PPV usage among subscribers with TV Agent.
Another 70% said the information MyDTV delivered, based on respondents' preferences, was very or extremely accurate. Other findings included: 90% of users viewed an alert for a program or topic they set at least once; 84% switched to a channel or program after an alert; 47% of users said they'd like to see TV Agent become a permanent part of their digital-cable service; and 43% said it added value to digital service.
Perhaps most encouraging for MyDTV: 55% of respondents said they would pay between 50 cents and $1 per month for the service.