The almost myopic focus on this one segment has left fallow tremendous revenue opportunities among high-income consumers, and at a time when video ARPU is under tremendous pressure.
Plano, TX (PRWEB) September 02, 2015
According to new research from The Diffusion Group (TDG), the realities of the new 'barbell' economy are setting in for legacy TV operators. Today’s 'race to the bottom' -- characterized by ‘skinny bundles’ and thinning margins -- is driven in large part by the need to provide consumers on the lower end with less expensive TV options. That said, operators and networks would be wise to also consider a 'race to the top' strategy, apropos their high-income subscribers. These and other strategic insights are discussed in TDG's latest report, Luxury TV in the Age of Skinny Bundles: ARPU among High-Income Households, 2015-2025.
"Much energy is being spent on the design and creation of services for younger low-income Millennials," notes Joel Espelien, Senior Analyst for TDG and author of the new report. "While these efforts are not misplaced, they are myopic and have left fallow the tremendous revenue opportunities among high-income consumers, and at a time when video ARPU is under tremendous pressure."
The US economy has undergone polarization during the past three decades, with incomes among the top 10% of earners growing strongly while median household incomes have stagnated or declined. The classic tripartite income model is being replaced by a barbell economy characterized by expansion at the low and high end.
According to Espelien:
- MVPDs should design premium service offerings that appeal specifically to the high-end segment, such as 4K, cloud DVR, and tiered SVOD services.
- Operators should create new brands in order to clearly distinguish such services from their mainstream offerings.
- Content and broadband sports providers must move beyond a one-size-fits-all approach to production, and develop tiered versions of shows and live events that can be sold to high-income consumers at premium price points.
TDG's new report, Luxury TV in the Age of Skinny Bundles: ARPU among High-Income Households, 2015-2025, provides a first-ever analysis and forecast of how this segments spends (and will spend) on a number of key services, including broadband, mobile, and video services (including Legacy TV and OTT, not only today but for the next decade). TDG examines three possible scenarios: a base case in line with current revenue strategies; a downside case where the industry suffers a collective $5 billion shortfall; and an upside scenario in which the industry captures more than $12 billion in incremental spend by High-Income Households.
For more information about TDG's new report, please contact our sales team at sales(at)tdgresearch(dot)com or 469-287-8050.
About TDG Research
TDG provides actionable intelligence on the quantum market shifts impacting consumer technology and media behavior. Since 2004, our market research and advisory services have helped technology vendors, media companies, and service providers understand how consumers access, navigate, distribute, and consume broadband media -- whenever and wherever they may be. For more information, visit our website at http://www.tdgresearch.com.