WaveLength Identifies Growth Drivers for Consumer IPTV Services

Picture of IPTV Case Study

Summary:

A tier 1 service provider made substantial investment in offering new IPTV services and needed to know why some areas had better service uptake than others. WaveLength used internal monthly reports on subscriber numbers, VHO and corresponding service area zip codes and consumer demographic data. Analysis identified the key predictors of IPTV adoption as Existence of Children under Ten Years and Income. Armed with this information, this service provider created marketing campaigns to appeal to young families that boosted service uptake.

Problem: Need to understand market penetration and adoption drivers by Video Head Office (VHO)

After making a substantial investment is IPTV, service adoption per video head office was highly inconsistent. Some local geographic markets were clearly doing than others and this Tier 1 service provider needed a deeper understanding of service uptake and what drives it.

Key info that could change business: What are the differences between higher service subscribing areas compared to lower ones?

  • What is subscriber penetration per VHO? How does it change over time?
  • What are the service uptake drivers?
  • Best data sources: internal data, third party data, & service launch press releases

  • Internal monthly reports of subscriber numbers
  • Internal reports of service areas by 9-digit zip codes for video head ends.
  • US Census data, American Community Survey data, and Internal Revenue Service (IRS) data
  • High-value information: Income and existence of children under ten in household drives service adoption

  • WaveLength mashed up data from several sources.First, 24 internal monthly reports of subscriber numbers were merged to create a single large data set containing VHO subscribers numbers and imputed growth rates for the two-year period.
  • Second, for each zip code within a VHO service area, WaveLength pulled demographics per zip code from the US Census. Since the Census was already 9 years old, source data was updated using growth assumptions published by the American Community Survey. This step was absolutely necessary because the service provider focused initial infrastructure build out in new residential and redeveloped areas.
  • Data that describes each zip code as published by the IRS was also merged into the data set.
  • All zip code data was then aggregated by VHO service areas to create the measures that describe EXACT service areas containing number of household per VHO and other key demographic measures.
  • The two data sets where merged to contain the two-years of VHO subscriber numbers, growth rates, and descriptive demographics
  • The last step was to control for service availability duration, as days the service was on the market is highly correlated with higher growth rates.
  • Once the data set was assembled, since we now had both the number of subscribers and number of households per VHO, we created market penetration rates per VHO and changes in market penetration per VHO. Finally, we performed a series of regression analyses on drivers of adoption by both VHO and all VHO numbers together. The conclusion was that the existence of young children under ten years old in a household was the strongest predictor of service uptake, and income was the second strongest predictor.

    Results: Focus marketing on young families

    The service provider refined its focus on young families, and marketed it as a good entertainment value because of it high quantity and high quality content for children. With WaveLength’s in-depth knowledge of the consumer Internet, TV, and telecommunications market together with its data analytics expertise, WaveLength was the right partner to assist in the creation of a new marketing strategy.