As the pay TV business moves through its latest evolution, the product emphasis is primarily on speed and choice. But as subscription TV service gets more complicated — Verizon Communications’s Fios Mix & Match offering is the latest step toward the Holy Grail of a la carte programming — so, too, do the more mundane aspects of the business, like how to collect payment for the myriad content opportunities presented to consumers.

There is a handful of vendors that have controlled cable billing since the industry began, with CSG Systems, Amdocs and NEC’s Netcracker being among the largest. But as offerings continue to grow, so does the danger of confusing the customer. And for just about any industry, billing confusion and questions are usually at the top of the list when it comes to poor customer satisfaction.

On the surface, billing seems to be relatively straightforward: You order a package and you pay for it. But with telecom companies, there is a slew of hidden charges, fees, promotional offers and pricing that can puff up a monthly bill almost beyond recognition. And with the future expected to be rife with choice, that also means there are more opportunities to disrupt the relationship.

Top Reason for Customer Calls

“It's pretty much common knowledge that questions about billing are one of the top reasons for subscribers contacting their operator,” said Dr. Charles Patti, Cox chair in customer experience and senior fellow at The Cable Center in Denver.

In a September 2019 ranking of television service providers by J.D. Power, companies with a high number of billing complaints ranked low on the customer loyalty scale. Per J.D. Power, nearly 40% of television and internet customers who had a high bill complaint said they didn’t achieve a resolution. Additionally, 52% of internet subscribers who had a high bill complaint said they would switch carriers.

Cable did a lot better in the J.D. Power rankings as an internet provider than as a video distributor. Comcast was No. 1 in the North Central region among internet providers, No. 2 (behind AT&T) in the North Central and the South and No. 3 (behind AT&T and Cable One) in the West. But it ranked fifth in the East, third in the South, North Central and West regions as a television provider.

Part of that has to do with customer perceptions and the higher cost of cable video service (because of higher programming costs), as well as past federal fines for charging customers for services and equipment they didn’t authorize.

“Taking every opportunity to demonstrate transparency is a customer-focused outlook that improves the overall customer experience,” Ian Greenblatt, J.D. Power managing director and practice leader, technology, media and telecom intelligence, said in a press release announcing the rankings last year.

About 65% of North American pay TV subscribers run on CSG platforms, and the company counts Comcast, Charter Communications and most of the other large cable operators as customers, as well as about 20 direct-to-consumer platforms in the over-the-top space.

Billing questions are still at the top of customer complaints, said CSG head of global product management Chad Dunavant, and operators are making changes, especially around the concept of prorating. That can be the culprit when a customer calls to complain that they signed up for a $99 service, yet their first bill was much higher, he said.

Operators are either removing prorates and providing service for no cost during the time that the billing dates differ, or aligning the dates programmatically as part of the order process.

“Customers are more comfortable with the subscription model due to new entrants and are OK having service through the date of their service," Dunavant said. “Moreover, operators are starting to play around with base packages that have a recurring billing relationship and then ala carte services that are sold directly through a credit card with a separate billing relationship. All of these models are things the billing systems can support, and areas CSG has invested in to ensure our operator customers can meet the demands of the market.”

One thing CSG is doing to simplify the process is a product it calls the “video bill,” where it sends out a personalized interactive video tutorial of what a customer’s first bill looks like.

“We send out emails when you order; we send out emails when your statement processes; we send out emails when your second statement processes,” Dunavant said. “There are all of these interactions to try to make it easier for consumers to understand. As a la carte rolls out and is adopted, those techniques will become even more important.”

Comcast began implementing the video bill in 2015, spokesperson Katie Lubenow said. Customers can access it through the MyAccount app, by saying “explain my bill” into their X1 Voice Remote or through the Xfinity Assistant, an always-on virtual assistant that customers can access online or via the Xfinity mobile app.

Charter has a similar customer video on its website that breaks down billing statements. Elsewhere on its website, it explains the vagaries of franchise fees, sales taxes and other charges.

In 2018, Comcast redesigned its billing statements, with the help of customer feedback, to make them easier to read and understand. Bills broke out one-time and recurring charges and highlighted changes in service.

“We believe in a clear, transparent billing experience for our customers,” Lubenow said, adding that the changes have resulted in reduced calls about billing problems.

That could get a little more difficult as the video business evolves into a more a la carte model.

“We’ve definitely seen the industry evolve from just something that was basic pay television to cable television that included a lot more bundling and cross-promotional discounts into a multi-line-of-business universe,” Dunavant said. About six years ago, he said, CSG began offering an OTT billing product, and the move toward direct-to-consumer distribution actually simplifies the billing process.

“On the OTT front specifically, it’s less complex,” Dunavant said. “Typically with OTT, you’re dealing directly with a content provider or a studio, not an aggregator, so the plans are much simpler. And the way you think about billing is simpler, because in most cases they are just doing credit card-only. You’re looking at a line item that might show up on a credit card for $9.99 per month and it shows a content distributor on that line item. It’s pretty simple, versus these large-scale bundles that have multiple line items and franchise taxes and everything else that goes with it.”

While the Fios Mix & Match offering is seen by some as the next step toward a la carte, Sanford Bernstein media analyst Peter Supino wrote in a note to clients that the offering is more “evolution, not revolution.”

“With ‘custom’ video bundles, the marginal video customer gets what he/she wants (to not buy things that they won't watch), while Verizon optimizes its per subscriber video costs,” Supino wrote. “This additional margin opportunity funds Verizon's elimination of video's infamous add-on service fees (but NOT set-top box rentals charges).”

The Experience in Canada

A la carte, to some, is an inevitability, and CSG is already traveling down that road. Among its customers are Canadian operators that have been offering a la carte programming to customers since 2016 as part of a government mandate.

So far, a la carte hasn’t been a challenge on the billing side, Dunavant said, because not that many Canadian customers are taking advantage of it. Those who do are only selecting a few channels.

“We haven’t seen a huge uptake yet,” Dunavant said.

But in a scenario where customers are selecting hundreds of a la carte channels, it gets a lot trickier.

“That becomes complex, because now every single channel has a price,” Dunavant said. “And how do you display that to a call center agent or how do you display that to a customer?

“One of the things we’ve done within our applications is to put in search functions and put in toggles that allow you to group channels together and make it easier to find and identify the channels that you need,” he continued. “The other part of the challenge is how does that get displayed on a bill.

“Imagine a situation where somebody picked 100 a la carte channels. Now you have 100 line items on a bill for each a la carte channel,” Dunavant said. “When you’re doing a statement run and are trying to keep your costs down, that becomes costly.”

Charter Communications has begun notifying customers that it will no longer prorate the final month of billing for customers cancelling their service.

This would mean that customers who, say, move halfway through a billing cycle and cancel service are still on the hook for the entire monthly bill.

“Effective on or after June 23, 2019 and consistent with the terms and conditions of service, Spectrum will no longer provide pro rata credit for services sold on a monthly basis that are cancelled prior to the end of the current billing month,” reads a graph included on May billing statement for broadband service delivered to MCN’s Los Angeles office.

Charter reps didn’t immediately respond to MCN’s inquires for comment and clarification. It’s unclear as to whether the policy change is footprint-wide across the 41 states Charter services. Stop the Cap was the first notice and report on the change. Ars Technica confirmed it with a statement received in Texas for internet, TV and phone triple-play service, as well as in Ohio.

As Ars also noted, AT&T and Altice USA have similar policies. Comcast and Verizon still prorate final monthly bills, the site added, quoting policy.

iflix, a multiscreen SVOD service for emerging markets, is using CSG Systems’s “Ascendon” digital services platform to consolidate and manage an array of payment options.

iflix, a service with about 3 million subs, offers thousands of TV shows and movies for streaming and download to multiple devices.

CSG said Ascendon will enable iflix to create a centralized eWallet that consolidates all payment options, including those made by credit card, PayPal, Google in-app purchasing, gift cards, vouchers and payments made through direct operator billing. Ascendon will also manage the redemption process for gift cards and vouchers for iflix.

iflix expects to launch the eWallet capabilities of Ascendon in late Spring of 2017.

CSG introduced its cloud-based Ascendon platform in March 2013, with Comcast on board as an early adopter.

RELATED: CSG Blazes Digital Path With ‘Ascendon’

“We have created a world-class Internet TV product with a customer focused approach and aim of providing individual users with the best experience possible. This commitment includes giving customers convenient payment options to best suit their preferences,” Emmanuel Frenehard, chief technology officer of iflix, said in a statement. “As we continue to enter new markets around the world, Ascendon allows us to quickly make new, local market payment options available to consumers, as part of our mission to deliver the world’s best content at a price that everyone can afford.” 

It’s no secret that cable companies have earned a rather unsavory reputation over the years, due in large part to things like surprise service costs and customer grievances. Fortunately, there are specific steps cable companies can take to flip the script — and many don’t require a ton of effort. Little things like increased transparency, improved home visits, and more product flexibility can all go a long way.

Transparency that adds clarity
Over the years, transparent billing practices have been a serious shortfall for cable companies, and a major point of contention for customers. No one likes to be surprised by product and service limitations or additional fees showing up on the bill.

Want to build trust? It’s pretty simple: Be straightforward about your products and services and what they can and cannot do.

Customers will be much more forgiving of shortcomings as long as they know exactly what they’re getting into. Listing services and products individually and in specific detail online, including any limitations, is a great place to start. With popular sites like Yelp and Google reviews aiding customers prior to purchase decisions, consumers expect full details to be available at the outset. Not every service or product will be perfect for every customer; so being upfront on the exact pros — and even the cons — is a key selling point.

The same is also encouraged when it comes to billing. No one enjoys getting surprised by unexpected charges. If extra fees do need to be applied to a bill, then the customer should be notified as soon as possible. From there, providing a concrete explanation can smooth over an uncomfortable situation, improving customer relations.

House calls that bring the love
Home installation of cable and internet services is one of the few times customers have a face-to-face experience with the cable company. That rare connection makes these interactions some of the most important moments your company will have with each customer, and can leave a lasting impression. Narrowing down appointment time slots and quickly replacing damaged goods on these visits are simple ways to mitigate negative customer feelings.

As some companies have begun to figure out, a shorter appointment window is a huge (and easy) way to improve the service experience, because it allows customers to maintain a better sense of their personal schedule. If you can pull it off, a two-hour timeframe is preferred.

In more serious scenarios, the longer appointment window could cause previously installed hardware to become inoperable or damage to personal belongings. No matter the situation, it should be handled quickly and without additional cost to the customer. Resending a technician to replace malfunctioning products or a customer’s damaged personal electronic devices at little to no extra cost should be offered as soon as possible. This can be accomplished by partnering with a third-party warranty provider.

Personalization that increases flexibility
Today’s consumers live in an a la carte world. By offering more personalized packages with set prices for each individual service, cable companies can set themselves apart and better compete with streaming options, while also catering to customer lifestyles and budgets.

Cable companies have earned a negative reputation over the years — but it doesn’t have to be that way. With these tips and suggestions for breaking harsh stereotypes, you can make your customers’ lives a whole lot easier.

Roger High is vice president of new markets for Fortegra, a credit protection, warranty and underwriting provider.

A class action suit has been filed against Comcast over its break-out of retrans fees on customer bills.

Cable operators have been increasingly including a broadcast TV line item on bills so customers can see how much MVPDs are paying in retransmission-consent fees for those signals.

Cable operators and broadcasters have been in a pitched battle over the fees, with broadcasters saying they are just trying to recover the true value of their content after years of it being undervalued, while cable operators say broadcasters are using a government thumb on the scale to jack up prices that ultimately are passed on to consumers--hence breaking out the fee.

In the suit, filed in a California district court, a handful of Comcast subs argue that the broadcast (and regional sports channel fees also broken out) are a way to raise the price while continuing to advertise a lower price.

The suit is filled with assertions that Comcast is lying to cutomers about the price by referring to the charges as government fees or taxes--retransmission payments were created by Congress, with negotiations subject to FCC rules on good faith negotiations.

The plaintiffs say Comcast's representation of the fees is "fraudlent, unfair and intended to mislead."

“We have been working to make it easier for customers to understand what they’re paying for, which is why we list the Broadcast TV and Regional Sports fee separately on the bill and include disclaimers about them in our advertising," said Comcast in a statement on the suit. "It’s also worth noting that the complaint itself demonstrates that these fees are disclosed and that they’re not part of promotional pricing.”

Comcast in 2013 separated out the broadcast fee as an itemized charge, joining Charter,AT&T's U-Verse, and others.

The vast majority of consumers (90%) are interested in upgrading from a basic subscription to one that includes valuable privileges, including discounts, exclusives and access to events or activities that involve other subscribers, subscription billing specialist Vindicia found in a new study, Consumer Demand for Value-added Subscription Services.

The survey, based on data from 1,000 U.S. adults who have at least one paid subscription, also found that 76% of the group would be willing to pay $3.99 more per month for a subscription that gives them access to premium content or other members-only benefits. That rises to 84% if  that price is set at an extra $1.99 per month.

Among consumers surveyed who have multiple subscriptions, those that that deliver over-the-top video/video-on-demand services were the most important to them (40%), followed by shopping (32%), then audio (9%) (see chart).

OTT/VOD was also the most frequently used subscription service (42%), followed by shopping (28%), audio (13%), and print media (5%).

Broken down further, 45% said OTT services such as HBO Now, Netflix and Hulu were the most important to them, while 30% cited shopping services such as Amazon Prime and Google Express, and just 8% identified audio services such as Apple Music, Pandora, Spotify and Audible.

Regarding engagement, Vindicia found that 30% of consumers used their most-utilized subscription service at least 20 hours per week, while 28% used them between 11 hours to 20 hours per week, and 42% used them between 1 hour to 10 hours per week.

Vindicia’s study also shed some light on why some consumers opt to cancel their subscriptions. Of those who recently canceled, 39% said it was because they didn’t see the value in the subscription, 36% said they no longer wanted the financial obligation, 34% said the subscription was no longer relevant to them, and 13% cited billing issues, such as difficulties updating credit card info or confirming payment details. 

Colorado-based billing and customer care company CSG International said it has appointed industry vet Marwan Fawaz to its board, and has promoted  CTO Ken Kennedy to EVP of product development.

Both execs assumed their new roles and responsibilities today (March 1).

Fawaz, a founder and principal of consulting firm Sarepta Advisors, is also on the board of Synacor and is an advisory board member of ADT, Liberty Global and Guavus, a big data firm.

Fawaz, recently named to the 50th anniversary class of Cable TV Pioneers, was in charge of Motorola Home before Google sold it to Arris in 2013, and is a former CTO of Charter Communications, Adelphia Communications (sold to Comcast and Time Warner in 2005), and MediaOne (now part of Comcast).

CSG said it developed its relationship with Fawaz during his time at Motorola and at Charter, which recently extended its agreement with CSG.

”Marwan Fawaz has first-hand knowledge of the inner workings and needs of CSG’s strategic markets, and he will bring an insider’s perspective that will help CSG align to address the challenges that these dynamic industries face,” Don Reed, chairman of CSG International’s board of directors, said in a statement.

CSG said Kennedy’s promotion followed his work to define the company’s technology roadmap and align the company’s technical vision with its business strategy.   Kennedy has managed CSG’s software development organization and been responsible for various aspects of developing and implementing technology initiatives related to CSG’s product offerings over the past 10 years. Kennedy joined CSG when the company acquired Telution, an OSS company, in 2006.

“Ken’s expertise and vision has led us to develop new innovations in our solutions portfolio that enable our clients to have more agile and dynamic operations. His promotion is an acknowledgment of the value that he brings to the future of our organization and to our clients worldwide,” added Bret Griess, CSG International’s president and chief executive officer. 

Colorado-based billing and customer care specialist CSG International has appointed Brian Shepherd to the post of executive vice president of CSG International and president of its Global Broadband, Cable and Satellite business.

Shepherd is late of several companies from the billing and customer care sector, including TeleTech, Amdocs, DST Innovis, and McKinsey & Company. During his time at Amdocs, Shepherd held key exec roles leading its broadband cable & satellite, North American Communications and Interactive divisions.

In his new role at CSG, which expanded its agreement with Comcast in 2014, Shepherd will focus on accelerating the growth and strategic direction of CSG’s global broadband, cable and direct broadcast satellite business.

“The pace of change and innovation in our industry has never been faster,” said Shepherd, in a statement. Our customers are leading the digital transformation fueled by broadband availability, innovative new services and the proliferation of devices. CSG will continue to invest in and support the future success of our valued customers.”

“Globally, the video and entertainment industry is transforming its business to better serve the mobile, digital consumer,” added Bret Griess, president and CEO of CSG International. “Now, more than ever, operators need new strategies and solutions that will allow them to expand relationships with existing and new consumers, and empower consumers to take their video content with them wherever they go, across all devices.  The combination of a proven and trusted industry leader like Brian and CSG’s unrivalled domain expertise in the cable and satellite markets will enable us to continue to deliver exceptional business outcomes to cable operators around the world.”

CSG Systems said CEO Peter Kalan has announced plans to retire on Jan. 1, 2016, and that the billing and customer care company has tapped Bret Griess, CSG’s current president and COO, to succeed him.

Griess, 47, will also be appointed to the CSG board effective January 1. He’s been with CSG for more than 19 years, and currently oversees the company’s global sales, operations and delivery, client relationships, product development and management.

Kalan (pictured), 56, has served as CSG CEO and president since December 2007. Kalan joined CSG in January 1997.

CSG’s customers include AT&T, Comcast, Dish Network, Orange, Reliance, SingTel Optus, Telecom New Zealand, Telefonica, Time Warner Cable, T-Mobile, Verizon, and Vodafone, among others.  Of recent note, Colorado-based CSG struck an extended deal with Charter Communications that covers residential billing, customer care services and its new digitally-focused Ascendon platform, through December 2019.

“On behalf of the CSG Board of Directors, I am extremely grateful to Peter for his outstanding leadership,” said Don Reed, chairman of CSG’s board, in a statement. “Under Peter’s leadership, CSG has become the leading business support solutions provider in the North American cable and satellite markets, expanded our presence internationally, invested in next generation solutions aimed at the changing video landscape, and groomed the next generation of CSG leaders to build upon this legacy. Bret’s appointment as chief executive officer by the board is the result of a robust succession planning process and the confidence that we have in this management team to continue to drive long-term shareholder value as has been done under Peter’s leadership.”

“I am honored to have worked with such a committed and dedicated group of employees,” Kalan added. “Over the years, I’m very proud of the work that we have done to enable our clients to compete in an extremely challenging and dynamic environment. This could not have been accomplished without an active and engaged board of directors and a highly qualified and talented executive team. Bret and his teams have played an integral role towards transforming our company into a trusted partner to the world’s leading communications providers. I am leaving the company in good hands with Bret and this broad and deep bench of experienced leaders within the company.”

“I am grateful to have the opportunity to lead CSG at this exciting moment in our history,” said Griess. “I look forward to working with the board, our customers, our leadership team and our highly talented employees as we continue to enhance our competitive position in the markets we serve, execute on our strategic plan and continue to deliver strong results benefitting our shareholders, customers, employees and communities in which we operate.”