September 26, 2014

Recording is generally a high annual revenue per user (ARPU) service. The equivalent cost of deploying a premise-based recording system is very high, involving a large capital outlay, and is typically out of reach for many small organizations. Hosted recording offers a solution for organizations of any size, in any industry. How can Service Providers bring this to market?

Service Providers typically offer recording using one of two business models:  

  •  Bundled service
  • Value-added service

A bundled recording service offers a feature set of the core telephony product. It is usually a very basic recording service that records and offers a search and replay function coupled with limited online storage. For example, customer recordings are stored online for 7 days. Service Providers use this technique to differentiate their product set from others in the market. Providing a core hosted telephony service with inclusive call recording is unique in the market, and in return, increases the perceived value of the Provider’s service offering.

Bundled services are almost always part of the Service Provider’s product strategy. The strategy also often consists of a portfolio of additional recording products that Service Providers are able to use for upsell. On the other hand, additional recording products may provide more appropriate feature sets for specific vertical markets, such as finance and regulatory or call center environments.

Offering recording as a value-added service is another product strategy, and it is frequently coupled with the bundled approach, as explained above. Value-added services are generally quite simple. Adding too many options confuses customers and increases the provisioning and billing complexity. Products suitable for call center recording (feature rich) and regulatory recording (longer online storage retention) are the two most common product variants.

Pricing models for Recording as a Service are also generally quite simple and often fall into line with the pricing strategy of the hosted telephony service. For example, some Service Providers will charge a setup fee for recording, while others find that this conflicts with their pricing strategy, and they choose to charge only a monthly service fee.

Pricing is generally based around a fixed monthly service fee because it is simple to understand and simple to bill. The fee may include a storage allowance (measured in gigabytes (GB)) with additional storage charged per GB. Occasionally, Service Providers will choose an alternative pricing approach. For example, pricing on a usage basis (price per minute of recorded call, possibly as an uplift to the call charges), but this is an uncommon approach.

The diagram above illustrates that Providers start with a simple per subscriber service, adding vertical applications to suit specific market requirements, combining them to make the customer far more “sticky” as the cost of migration becomes proportionally greater.

In conclusion, there are many ways for Service Providers to monetize recording as a service. They can use a bundled, value-added approach, or a combination of the two. This provides a portfolio of services for customers of any size and in any industry with the ability to customize solutions, and upsell product features with a simplistic pricing strategy.