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Summary

The first wave of digital transformation is under way, with service providers (i.e., cable and telecom operators) at the forefront of this revolution as they try to transition to "digital" service providers. As digital media consumption patterns change due to the explosion of Internet-enabled devices, these digital service providers are increasingly investing in solutions that deliver a highly personalized user experience across multiple platforms. Traditionally, digital service providers have leveraged a household-centric customized service delivery approach (i.e., one that is focused on an individual service address) and thus content personalization is still at a nascent stage. Furthermore, cable and telecom operators have built expensive, siloed shared systems such as CRM, billing, and identity management to support household-based content and advertising recommendations, adding to the difficulty of making this shift. The multiscreen paradigm provides unprecedented monetization opportunities, but also brings complexities for digital service providers in delivering targeted advertising and tailored content services to each individual user. This is pushing cable and telecom operators to embrace a user lifecycle management (ULM) approach, based on digital identities for each individual user, along with the continued utilization of existing legacy shared platforms to enhance long-term customer engagement.

Centralized ULM within the digital service delivery ecosystem boosts ARPU and avenues for contextual ad monetization

Historically, cable and telecom operators have embraced a unicast service delivery model for users, encompassing

  • a rigid contact center-based consumer onboarding process and non-tailored subscription pricing packages

  • single identification and billing IDs for the core user in the household only

  • negligible customization of multiple services to different users in a single household

  • syndication and synthesis of usage and viewership data for the entire single service address

  • lack of contextual access (i.e., parental controls and different contextual programming depending on age, gender etc.)

Digital service providers are competing aggressively with content aggregators such as Netflix, Hulu and Amazon Prime by offering highly tailored individual audience-centric services, and taking a new approach to IT infrastructure is critical to improving their success. Changing digital services consumption trends on multiple devices and the adoption of cloud infrastructure to facilitate faster content-everywhere monetization are paving the way for cable and telecom operators to re-engineer the service delivery process into a multicast approach. This consists of centralized ULM (a user management layer) mapping individual household users to existing operator accounts on legacy shared systems, enhancing scalability and operational efficiencies.

ULM serves as a vital link between legacy OSS and BSS systems to facilitate seamless contextual access of digital services to diverse users at a single service address, and provides the opportunity for operators to become the digital identity provider for users as the base of core and cloud services involved in the user mix increases. For example, customized programming will be delivered to individual users in a single location instead of a standardized media feed. Granular individual user data syndication, tight integration with cloud services, a streamlined onboarding process, and multiple billing and authentication ID management for individual users eventually result in an increase in average revenue per (household) user. Cable and telecom operators can also embed a higher volume of contextual ads to multiple targeted users in a single household, resulting in a sizeable increase of inventory.

Finally, as digital service providers embark on the smart home journey of embedding external Internet of Things (IoT) devices such as the Nest thermostat, Fitbit, and automobiles into the service delivery ecosystem, combining group-based core and cloud services with individual personal services, ULM will play an essential role in enabling this digital transformation.

Appendix

Author

Kedar Mohite, Senior Analyst, Media & Broadcast Technology Services

kedar.mohite@ovum.com

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