For subscription companies, for streaming media in particular, content is king.
But having the right content is only half the battle.
The other half of the battle is keeping consumers in place, on the proverbial couch and logging in, so to speak.
That’s well in evidence in recent reports from The Wall Street Journal (WSJ), which noted Monday (Jan. 31) that (per data from Antenna Analytics) as many as half of U.S. subscribers who signed up for Disney+, HBO Max and Apple TV just days after the debut of popular content like “Hamilton,” “Wonder Woman 1984” and “Greyhound” had left the platforms within six months.
Jockeying for Eyeballs and Loyalty
The findings highlight a perennial problem for any platform, which must constantly jockey for eyeballs and wallet share. Then there’s the problem of keeping people firmly entrenched, exploring the content (be it music or video or games) that goes a bit deeper than the most-highly-trumpeted titles. The more they find that goes beyond the superhero movies and the other blockbusters that lured them in the first place, the more likely they’ll feel affinity for the platform and stick around.
For the platforms that see such “hopscotching” as individuals and families jump on and jump off with buzz-worthy content, subscriber acquisition costs become a mounting challenge.
Netflix’s most recent results show evidence of the pressures confronting subscription firms as the pandemic winds its way into yet another year. The overall theme is that subscribers, increasingly, are less willing to “set it and forget it.”
Read more: New Streaming Dynamics Threaten Netflix, Subscriber Growth
The most recent results showed 222 million subscribers, and still the market leader, the platform added 8.28 million net paid subscribers worldwide in the fourth quarter of 2021, compared to 8.5 million subscribers in Q4 2020.
The company said it expects to add 2.5 million subscribers during the first quarter of 2022, which is below the 3.98 million it added in Q1 2021. Households are re-examining expenses tied to streaming and other subscriptions.
There’s at least some hint of saturation, as PYMNTS research has found that 81% of all U.S. consumers have at least one subscription service in place, and the average consumer has more than three subscriptions in place.
See more: New Data Cites Flexibility, Discounts as Top Retail Subscription Churn Fighters
But there are ways in which the platforms can keep the churn from being quite so pronounced as hit titles come, make a splash — and then the consumers go.
Simply put, these companies have the data on hand for personalization, and even the flexibility of payment options, to keep consumers interested and engaged.
Vindicia Chief Strategy Officer Trace Galloway told PYMNTS the data can be used for bundling, in a bid to personalize what’s on offer, subscription by subscription.
Read more: As the Subscription World Churns, Providers Must Get Personal to Avoid the Cut
Proactive Approach
A proactive, content-driven approach, then, could do much to “jog” consumers’ interest in content that is tailored (well beyond the standard prompts you know by now — the “because you watched” suggestions that are a staple of Netflix and Amazon Prime and others).
A proactive approach can be used, too, to enable consumers to pause payments, while remaining in place as subscribers.
In the bid to be proactive, there are ways that platforms can, well, help platforms. As Galloway told PYMNTS, “There’s different things you can do, and we’ve been trying and working here at Vindicia to expose more and more of what we call our subscription intelligence layer, which is really all about these underlying analytics that look into the big data trends of a business, to a large extent around core billing operations.”
It’s not too far-fetched, then, to think that easing the payments part of the equation can be at least part of the solution to the churn problem. Churn can indeed be elevated when payments fail and the friction moves a subscriber to vote with the proverbial feet.
In a separate conversation with PYMNTS, FlexPay CEO Darryl Hicks told Karen Webster, “If you look at where the churn is coming from in your book … typically 48% of the churn is coming from failed payments. We see that a lot of merchants think churn is happening in customer service or [because] people are dissatisfied with the product or service. But if they’re not focused on the failed payments, they’re missing 48% of the problem.”
See more: Almost Half of Subscription Churn Caused by Preventable Friction in Failed Payments
Hicks said merchants and subscription firms should adopt a payment authorization management (PAM) strategy, which he said many top performers use to reduce failed payments as part of an “invisible recovery” strategy.