Earlier this year Scott Sobolewski from Innovative Systems, and Amanda Molina from JSI addressed a topic that is rarely addressed, how to right price your products and services.

ACPU and ARPU

Most folks are familiar with Average Revenue Per User (ARPU). Fewer are familiar with Average Cost Per User (ACPU) which makes ARPU more relevant when it comes to the right pricing of your products and services. When calculating ACPU on a video service it is much more than video headend or programming expenses. Molina advises operators to look at a service like video as a stand-alone service and then include everything that you would need as a company to provide that service to determine the true ACPU. As far as ARPU, Molina stresses to include everything revenue-related to that service like, install fees, service call fees, and disconnect fees.

Only after true ACPU and ARPU are calculated can you determine your net profit margin. When ACPU is your baseline for rate setting if you have a product or service priced below ACPU your result is negative net revenue and then your company is paying for that end-user to be your customer.

To watch the full webcast follow this link.