According to the Wall Street Journal, Pay TV has crossed a new frontier: its first ever drop in total subscribers. While the economy certainly is at fault, another factor behind the dip – and one that will remain long after this downturn is just a memory – is relentless competition.

Downturns come and go. In the video arena, tough competition is a 24/7 reality show now and for the foreseeable future. Just how tough is it? For consumers, the proliferation of choices is a veritable video candy store. Consider several "clips" from today’s media-saturated home market:

Consumers who kick back in front of a high-def, flat-screen TV or a PC with a broadband connection can download movies cheaply and can watch free programming originating from almost anywhere in the world.

Cable customers now benefit from features once associated only with the Internet, including interactive program guides that allow them to view movie promos, vote on community issues, join social-media chat rooms to discuss favorite shows, or opt to have personalized ads pop up and then engage in video commerce to buy consumer goods.

“Companies need to find and focus on a "meaningful groove of separation" that sustains the competitive edge.”

Kids can hook their PlayStation IIIs, their Rokus or their Xboxes to any monitor and home or Wi-Fi network to watch music videos, to play games and to consume other content.

What’s turned out to be a gold mine for consumers often is just another competition headache for service providers. How does a company differentiate in an arena where the product – content – essentially is the same from one "channel" to the next and no contestant enjoys any real technological advantage over another?

In her best-selling book Different: Escaping the Competitive Herd, Harvard Business School professor Youngme Moon strikes on this very issue of differentiation. The problem: Products and services tend to compete by mimicking one another, with the result that they become well-rounded and indistinguishable in the minds of consumers. To escape the herd, Dr. Moon argues, companies need to find and focus on a "meaningful groove of separation" that sustains the competitive edge.

For a more enduring moment in the sun, service providers should take a cue from Dr. Moon. In the pay-TV space, the "groove of separation" may well lie in the ability to compete on the features customers value most: convenience, personalization and real-time responsiveness.

For all providers, the foundation of this superior service experience is an intelligent BSS and billing system that leverages real-time intelligence. The capabilities inherent in such "smart BSS" solutions aren’t just a special feature tacked on at the end – they’re the basic programming that drives customer loyalty and revenue growth. With intelligent BSS, video-content providers can be in sync with today’s “real-time generation,” instantly retrieving pertinent customer and product data to create dynamic customer profiles. With such profiles in place, service providers can deliver:

Cross-service promotion targeted to customer needs in real time, with personalized, customer-specific recommendations;

Flexible, sophisticated service bundling; and

Convenient ordering and billing for any device, anywhere, any time.

It’s hard to imagine a better way to dazzle an audience. Intelligent BSS and billing solutions may not be the flashiest services out of Hollywood, but they do have an edge – making a service provider different to customers and, in so doing, helping to ensure a sustainable commercial advantage.

Michelle Nowak is Global Head of Strategy, Solutions and Marketing for the Cable, Broadband and Satellite Market Verticals at Convergys. Contact her at michelle.a.nowak@convergys.com.

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