As streaming platforms navigate a seismic shift – pivoting to profitability after a decade of all-out development mode – they’re racing to develop their subscriber-retention muscle groups. However additionally they have to step again to make sure they’re flexing these muscle groups in the best manner (particularly, getting a greater and broader understanding of the complete subscriber journey) to verify they’re concentrating on retention spend the place it counts.
Media firms received’t survive the aggressive streaming world if they will’t resolve churn
As main streaming platforms attain a development plateau, tapping out the whole addressable marketplace for streaming viewers, they’re abruptly underneath intense strain to get critical about sustainable income and profitability.
Headline-grabbing strikes just like the Netflix password-sharing crackdown are Band-Aids for an even bigger drawback: Many SVOD platforms are taking a look at month-to-month churn charges as excessive as 20%-30%. It’s an issue throughout the streaming world. A current Antenna report reveals over half of the gross provides (new accounts) from 2021-2022 cancelled by March 2023.
Streaming platforms know that resolving churn is crucial to constructing a basis to outlive the so-called streaming wars.
Retention isn’t a binary subject
Main platforms have come a great distance since a couple of years in the past, when many took a reasonably simplistic view, concentrating on nonsubscribers to drive acquisitions whereas not doing almost sufficient to interact and keep subscribers. Most now use the information they acquire on subscriber behaviors to acknowledge alerts of churn threat (i.e., declining engagement) and set off retention campaigns.
However the established order nonetheless takes a binary view: Both a subscriber is a churn threat, worthy of retention spend, or they’re not.
Serial churners gum up typical retention methods
Excessive churn in streaming will get framed as a loyalty drawback, however it’s exhibiting itself to be extra of a characteristic of the business than a bug. Subscribers naturally shift engagement patterns primarily based on altering content material, altering monetary circumstances, and so on. It’s not a matter of pure loyalty to 1 platform or one other – subscriber behaviors are way more fluid and evolving.
Extra particularly, we’ve come to acknowledge a brand new class of “serial churners”: individuals who join and cancel streaming companies in a timeframe of months, not years.
Serial churners proceed to develop in quantity, leaping from 6% of all SVOD subscribers in 2020 to 22% in 2023 – with 1 in 3 new subscribers in Q1 2023 falling into this class.
However even this view misses essential nuance. Digging deeper into subscriber habits reveals a way more complicated set of subscriber journey paths – nicely past serial churner vs. platform loyalist.
Are you aware the three key churn personas?
Adobe and analysis agency Antenna not too long ago dug into these complicated habits patterns. Their current report recognized three distinct personas with acquainted habits patterns we will all possible assign to individuals in our personal lives:
- Win-backs: Antenna discovered {that a} full 35% of people that cancel a streaming service come again inside 12 months.
- Switchers: The analysis confirmed 30% of those that cancel a subscription swap to a competing streaming service inside two months.
- Plan managers: These are the roughly 6% of subscribers who don’t cancel however change their service plan (both improve or downgrade).
Retention methods should be tailor-made to subscriber journeys
Collectively and throughout all the streaming market, these three subsegments of shoppers signify a $9 billion alternative – the untapped middle-ground subscribers who match neither the loyalist nor the serial churn profile.
To make the reduce on this subsequent section of the streaming world, platforms have to embrace this richer, extra nuanced and extra holistic view of their subscribers. Furthermore, they should begin utilizing this deeper understanding to drive extra tailor-made retention methods:
- Perceive the place your retention efforts are going to have excessive vs. low incremental impression: Which subscribers are almost certainly to depart it doesn’t matter what? And which former subscribers are almost certainly to come back again on their very own? Reallocate your retention spend the place it issues most.
- Perceive why they’re leaving – and what brings them again: Half of shoppers swap to a brand new streaming service for particular content material/applications, based on StreamTV Insider. Others might comply with seasonal patterns. Anticipating the why and the what’s crucial to efficient retention and reengagement.
- See what “sticky” subscribers appear like: Acknowledge the habits patterns that enhance retention chance – then work to nudge subscribers in the best path. For instance, Antenna discovered 85% of subscribers who moved from standalone to bundled companies remained subscribed after 4 months.
Advancing maturity means getting previous the “construct it” mentality
Retention is now a prime precedence for each streaming platform. Nevertheless it’s not possible to understate the urgency of the problem. The second period of the streaming wars received’t be received by those who execute trendy behavior-based retention the finest, however by those who do it the quickest.
The excellent news is that streaming platforms have already got all the information they should achieve these deeper insights into subscriber behaviors and churn patterns. However many threat falling sufferer to the “construct it” mentality they inherited from the tech world.
Streaming leaders are happy with their in-house knowledge science groups; they’ve constructed aggressive benefit on their proprietary algorithms. It’s pure to wish to construct these extra superior subscriber habits fashions in home, too. Nevertheless it’s an entire completely different ballgame to construct an built-in buyer knowledge platform aimed toward engagement and retention.
Streaming leaders can be smart to take a web page from the playbook of extremely mature client manufacturers in different segments: Buckle down in your core enterprise. No firm might be an skilled in all issues. Confirmed platforms exist already for driving subtle, behavior-based engagement and retention. And those who select the build-it route shall be left behind by those who quickly activate established options.
