A new white paper from research firm nScreenMedia reported that Dish Network (NASDAQ: DISH) lost $1 million in revenue and support costs when its Sling TV crashed during Turner Networks' presentation of the March Madness Semifinal game featuring Wisconsin and Kentucky. Dish, which has reportedly acquired more than 250,000 users to the OTT service since launching it in early February, admittedly didn't anticipate the live-streaming load it encountered that April Saturday.
NScreenMedia's findings are part of a wider report from the company on the cost of providing phone and premises support for multiscreen services-related problems. The firm said U.S. and European pay-TV operators spend a total of $10 billion a year on those problems, of which around $7 billion stems from problems originating on customers' in-home networks.
So how did nScreenMedia arrive at the $1 million figure for Dish's Sling TV glitch? The technical error generated plenty of negative buzz in social media, the firm's white paper contends. Since 27 percent of the population is in the service's target market of millennials, and 37 percent of those do not currently have pay TV services, nearly 200,000 of Sling TV's target market received a strong negative impression of the service, the firm said. If just 5 percent of those were dissuaded from subscribing, nScreenMedia said, "the company will miss out on $1M in revenue over the next year."
As far as the $1 million price tag for the glitch, a Dish spokesperson said the company doesn't comment on "hypotheses and speculation."
In its report, nScreenMedia pointed to similar antidotal problems at other, unnamed operators. For example, the firm said "an authentication problem caused an hour outage that cost one operator $800,000 in call costs and lost revenue opportunity." NScreenMedia founder and chief Colin Dixon only identified the carrier as a "Tier 1 European operator."
In a separate instance involving another unnamed European operator, nScreenMedia said that "consumer confusion over how Wi-Fi operates is costing an operator with 10 million subscribers €4 million a month." According to the research company, a European operator said that it's paying that much in the form of truck rolls and call time due to legions of "angry customers claiming they are not receiving the broadband speed they are paying for. Upon further investigation, the call center employee often discovers that the customers are running a broadband speed test from a WiFi connected device in a room distant from their router."
How did nScreenMedia arrive at that cost figure? "The calls, the truck roll and the (often needless) router replacement are costing operators a lot of money. Assuming 30 percent of support calls are Wi-Fi related, one in a hundred results in a truck roll, and just 30 percent of those result in replacement of the router; an operator with 10 million subscribers is spending €4 million a month on home Wi-Fi issues."
Finally, a separate instance outlined by nScreenMedia points to the perils of CPE testing. The firm said an unnamed North American operator "allowed a single bug in a cable modem upgrade that wound up affecting 10,000 subscribers and costing $3 million to fix."
"One senior operational manager in a North American operator recounted how he had put in place a careful procedure for making firmware updates to the cable modems," nScreenMedia wrote. "That involved rigorous testing before rollout and then, once satisfied with the update, rolling it out gradually one network node at a time. A bug got through during this rollout that affected a specific revision of hardware. Unfortunately, this impacted all 10,000 modems on one network segment, rendering them completely useless (turning them into a 'brick', as the operator put it). The operator was forced to buy new modems, and send a truck to every home to replace each one over the course of a few days. Just to handle new CPE, customer calls and truck rolls, the cost to the operator to resolve this issue was $3 million."
"These operational challenges are costing pay TV providers in the U.S. and Europe nearly $10B in support calls and truck rolls, with $2.8B derived directly from operator failures," nScreenMedia summarizes.
- read this nScreenMedia white paper (sub. req.)
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