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IPTV Churn Issues Same as Analog Video
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February 20, 2008

IPTV Churn Issues Same as Analog Video

By Gary Kim, Contributing Editor

Though IPTV networks should deliver better image quality than analog networks, there are some problems IPTV (News - Alert) does not solve. When asked the reason for high call volumes from subscribers, 78 percent of IPTV executives at 12 tier one and tier two service providers in North America respondents say image quality problems are the top issue generating service calls.

More important: 77 percent say image quality issues are the reason for customer churn.

Also, the source of those problems does not shift just because an IPTV solution is in place. Over 72 percent of all video quality problems come from access networks and the home, respondents say, data that reflects the traditional experience cable operators have had as well.

High-definition TV services, in fact, arguably increase the amount of image quality problems customers might complain about, especially during the installation process or shortly thereafter. When asked what services were causing problems right now, 42 percent of respondents said HDTV was the issue. About 33 percent of respondents reported problems with CPE and home wiring. About 17 percent of respondents said issues with standard-definition TV services were issues. About eight percent reported that video on demand services were causing problems. Overall, respondents say eearly 40% of video issues appear to occur in the home. Again, that is a finding that matches up well with traditional cable TV industry experience.

Some 39 percent of the respondents said the highest percentage of video issues occur in the home; 19 percent said video issues are in the access network; 16 percent reported headend issues. Some 15 percent said other issues such as customer premises equipment or home wiring were issues. Still, 12 percent said quality issues occurred in the core or metro network.

Respondents also overwhelmingly reported that service quality problems are the primary cause of customer churn. Only 22 percent reported billing and change of service issues were top churn drivers, while  22 percent reported lack of features and price of the offer as reasons for customer churn.

None of these issues will be unfamiliar to anybody who has been around the U.S. cable industry. The in-home media environment is chaotic and highly non-standard, often requiring significant in-home labor to set up all video-connected devices in ways the home user expects. Users don't really care that the services provider does not own or really support all the other equipment that has to be attached to the network. They expect that when the installer leaves, nothing works any less well than it did before the installer showed up, including any additional equipment that may have been introduced during the install.

That often means a bit of instruction about how to use new remote controls and digital recording features.

In fact, one reason profit margins will be so tough in the IPTV environment is the labor cost to install customer equipment and then to maintain the in-home environment in its "as installed" state. One of the problems is that any in-home installation starts to drift "out of tolerance" almost immediately, as different family members and users start to interact with it, plugging in and then unplugging game players, moving remotes around, changing settings on remotes and accidentally causing other unplanned changes in the settings and configuration of the in-home network.

IPTV does change some things. It does create a platform for new services and should deliver better image quality on sets that feature increasingly large screens. But IPTV does not change the labor intensity of the entertainment video service, nor the follow-on chores of maintaining image quality and in-home network performance over time.


Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of his articles, please visit his columnist page.

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Today’s featured White Paper (News - Alert) is titled Security Considerations for an IP PBX and Contact Center, brought to you by Interactive Intelligence (News - Alert).

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