TDC reduces churn by 50 percent by giving away music for free

A few days before the one year anniversary of the world first give-customers-free-access-to-all-music (2 mio tracks from all major record-labels), Danish telco TDC reveals the rationale behind the groundbreaking move labeled “Play”. Figures revealed today by TDC ceo Jesper Theill Eriksen at the Tele2009-conference shows that churn – that is customers quitting TDC – has been reduced by 50 % for broadbandcustomers.

I don’t know how much TDC paid for the rights to freely distribute the music, but it’s bound to have been a good deal.

From a how-to-make-money from the media & telco-landscape of today, it’s interesting as well: It seems an extremely successful move to focus on value-adding for their customers, differentiating TDC from their competitors, and therefore also not only keeping on to their customers but also potentially allowing TDC to raise prizes (or at least not be as vulnerable to sheer prize-competition from competitors).

On a similar note Theill Eriksen also noted that the new heavily valueadded triple-play product (telephony, broadband and television) had outsold TDCs own expectations, already reaching 50.000 customers as opposed to the benchmark of 12.000. In this product the free-music service Play is also included as well as customer service and care-free installation.

Comments

  1. Yes TDC did it very good. But – they are dominant on the Danish marked and they have always tryied to kill smaller companies just as they might right now.

    Looking at TDC service, you have the real reason to why people leave TDC. If you want change you speed in your broadband, thay sude 2 weeks. This goes even for a company like ours. They simply have to “pay” costumers not to leave them.

    It may be right that they have reduced with 50% – but if you only loose 100 customers a month, it’s not a problem. TDC customers left TDC in thousands and proberly a lot they will leave, when music will be free for everybody, which it will some day.

    Anyway – a good article you have done here.

    Michael Peters
    International brand manager