Personalization: The future of recommendations

Feb. 12, 2020
Personalization is crucial to pay TV operators that need to increase the stickiness of their services in order to increase subscriber usage and engagement. Unfortunately, when the topic of ...

Personalization is crucial to pay TV operators that need to increase the stickiness of their services in order to increase subscriber usage and engagement. Unfortunately, when the topic of personalization is discussed, it is often - and erroneously - considered synonymous with recommendations.

Traditional recommendations generally operate on the basis that the system suggests content based on viewing history - you liked this movie, so you'll probably like this other movie (similar or not). However, if we put ourselves in the consumer's shoes for a minute, is this really what they want? For example, if our pay TV service knows we watched a Western movie, do we really want to sit and watch another four or five of them? And then there is the added issue of different types of movies popping up, with no obvious relevance at all.

The reality of today's pay TV world is that getting recommendations right is difficult. It is not simply a matter of inferring, with more of less scientific relevance, what the next best movie to watch might be. On top of that, recommendations defined by algorithms isolate the viewer from anything new, interesting or contrary to established interests. This results in subscribers' increasingly choosing to spend their time on Facebook, Netflix or Fortnite. The outcome of this scenario is easy to predict - customer churn.

With this in mind, how can operators address the personalization challenge?

Step 1: Consider serendipity

Naturally, there are other ways to go about creating a personalized user experience that doesn't just depend on "you liked this show, so how about this similar show?"

If viewers become disillusioned by the results, they'll look for something new. TV and film have always relied on variety, which is what we get today (even if we don't like all of it). It is also reasonable to realize that the modeling of patterns of behavior has a limit and that it creates filter bubbles, i.e. getting you more of what you seem to like and isolating you from reality and diversity.

Spotify is a telling example. Instead of trying to guess what the next best song would be for you to listen to, they create manually curated playlists and push them to their subscribers following an arbitrary segmentation. As a user, this is a great way to get what you like while discovering new songs endlessly.

Doing so helps to add a sense of serendipitous randomness to the user experience, which makes subscribers more likely to stick with a service that offers varied, interesting and surprising content personalized to the individual.

Step 2: The only question to ask is, "How to increase stickiness"

Looking at the stickiest services in the market, what makes them effective is the fact that their user experience is not a blocked flow. It is arbitrated on the spot, piece of content after piece of content.

Facebook is probably the most advanced in this field. When you are using this service, the feed you see is fully tailored and arbitrated on the spot, depending on your instant journey. An ad, a post by a friend, a general post, a video … everything is optimized for you to spend as much time as possible on the service.

At an operator level, being able to replicate this means connecting a lot of diverse sources of data and developing the know-how to make it happen. Operators more broadly need to move beyond simple recommendations and actively invest in personalization architectures based on valuable insight into the user.

Pay TV operators must start taking a new perspective on what it means to personalize a service. For example, think about the potential of segmenting to an area or a type of customer, and segmenting all the way down to a household or an individual person.

Step 3: Recommending content means having content

We have all been there. After being a Netflix subscriber for a few months, you have seen everything that seemed interesting, and you are desperate for new content. Netflix has to win its entire subscriber base every month, and that's why so much money is invested in content production. What attracts subscribers is not what makes them stay.

In this game, pay TV operators have a clear advantage. A lot of effort still needs to be made in order to allow a more flexible monetization of content between content owners and distributors, but today, operators have richer catalogues, and subscribers have access to a wide variety of genres. Being able to better display content, to play with the catalog base and combine it with other types of content they might have, enables operators to create a more compelling offering, and thus increase stickiness to their services.

Considering serendipity, constantly asking how to increase stickiness and making sure to have the right content are the three best steps to start creating a service that is engaging for today's consumers. With the right solutions and strategies in place, pay TV service providers are well-positioned to keep viewers coming back for more.

Jacques-Edouard Guillemot is SVP Executive Affairs, Kudelski Group.

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