Maybe I’m a little young, but do you remember the time when you had to strategically allocate time for your other chores during advertisement breaks so that you wouldn’t have to miss the program you were watching? For me, TV time has always been fondly associated with someone yelling, “But I want to watch another show!” and someone else shouting, “Come back, the show is about to resume.”
But this isn’t about me getting nostalgic for the 90s or starting a debate on the decline of broadcast television. It’s about what caused this to happen – the rise of streaming.
Our TV viewing experience has come a long way. We started with a black and white mono-channel that my grandparents complained they had no choice but to enjoy. We then moved to several linear channels and carriage deals provided by platforms at set prices. We even had a brief period where our weekends were marked by a visit to the nearest VHS or DVD rental store. With the eruption of internet services, we’ve quickly jumped to OTT platforms to stream most of our content.
Like many other industries that turned around overnight due to the pandemic, in April 2020 alone, there was a 198% increase in OTT traffic. Isolated at home, in quarantine, and with major production houses releasing movies on OTT, the way people consumed content and entertainment changed forever in 2020.
The OTT market is projected to reach $332.52 billion by 2025 due to the tremendous improvements in internet speed, quality of content, and accessibility. You may fear not understanding pop-culture references without watching the latest shows, but Deloitte says that there are more than 300 streaming services to choose from (making it really hard to catch all the references!).
The only problem with 300+ service providers is that there is always a constant need to keep up with the latest trends for the consumers. For example, if I want to stream ‘Game of Thrones’ on one OTT service, another popular show like “Stranger Things” won’t be available to me unless I have the OTT service that offers that show. Meaning I will need to subscribe to both services or miss out on something.
These sorts of annoyances have been building up among consumers. Until one day, it dawns upon them that they’ve subscribed to a couple of nominally (anywhere between $3.99 – $15.99 a month) charging OTT platforms and now have a guilty hole in their pockets.
Aside from financial implications for customers, last year, a study found that it took only 22 seconds for participants to become frustrated if they couldn’t find the series they were looking for. Another study conducted by Zemoga says that it’s become easy to jump ship when customers can’t find the content they are looking for or when they can’t find value for their money.
To tackle subscription churn, smaller OTT service providers look at aggregation, but the more prominent players know better and focus on improving their in-house content quality. If you’re an OTT player looking to enhance your in-app experience and in-house content as a long-term initiative, it would definitely work; that is until you realize your business model in the first place is still a leaky bucket. The solution lies in digging deeper into your consumers’ consumption patterns. This means constantly looking into building analytics, troubleshooting, and maintaining your subscriber base – which could be difficult to do in-house considering you’re already working hard to create the next pop culture phenomenon.
You want to focus on more quality binge-worthy, memeable content, and we get it. But how can you streamline your operations to seal off leakages and make it into a revenue-generating machine?
At Chargebee, we’ve been dealing with subscription management for quite a while, and we’ve learned a lot from talking to our customers and prospects. By entwining new ways of sorting subscription-related challenges, here are four things that you can do immediately to gain and retain more subscribers to your OTT business.
Experiment and figure out pricing
As pricing is directly tied to your revenue goals, it’s essential to experiment with it. Netflix, which popularised the OTT model, has a tier-based pricing model that is charged monthly. Hulu offers a hybrid pricing model and provides multiple add-ons that give viewers access to content owned by different networks and an option for live television.
Disney+ uses SVOD and has created new content from well-established franchises like Star Wars and the Marvel Cinematic Universe, as well as including add-ons for other OTT services, like Hulu and ESPN+, giving users new content and multiple streaming services, making the consumer feel like they’re getting more bang for their buck. Another top player is Amazon’s Prime Video service, which offers a pay-per-view option and privileges like same-day delivery in their Amazon marketplace. All of them rely on discounting strategies and accessible trails.
Even if you start with simple pricing structures, you’ll want an operational system that works with your new insights and any changes you’d like to propose in the future. Chargebee makes it easy by offering a platter of pricing options to choose from and gives the flexibility to rethink the pricing and quickly initiate changes.
Attract new customers
Whether a self-serve model or a hybrid model, any sales-driven business’s primary focus isn’t just to catch the attention of potential customers but to convert more of them to the platform. With the OTT market dominated by three to four key players, it becomes difficult for minor services to win the battle even with exciting content.
Apart from experimenting with different prices, trial periods, and freemiums, companies can do two other things,
Optimize checkout for conversion:
It has become essential to support the kind of flexibility that businesses seek to convert. Give your customers something relatable. It can be as simple as localized text or allowing additional payment methods. Maybe it’s providing straightforward calls to action (CTAs) and A/B testing to see what works best for you and your customers.
Humanizing, the self-serve experience:
Let’s say, as part of your holiday, you decide to go on a digital detox. However, while on holiday, you get a notification about a new Netflix show on ‘digital detoxing’ and receive an email that says: “We know you’d love this show!”. How many of you watch that show despite the digital detox you claimed you’d follow religiously? Most of you are probably nodding in agreement (I know I am). We’re just humans, after all. But this sort of customization is what sets apart OTT platforms, even if it may seem minor. Setting up these sorts of transactional emails makes your customers want to press a CTA.
These days, people personalize for the sake of personalizing—trust me, your users are used to seeing “Hope you are having a wonderful week <name>!” from almost every store or service they’ve ever used.
For personalization that moves people, you need integrations that support it. Build an integration ecosystem for a better user experience (UX). For example, you have a prospect using a trial membership, which is coming to an end in two days. Intercom integration will let you push for better activations with a more contextual question and support such as “Hey, I see your trial is about to end. Here are the shows releasing the week after, which we think you’d love.”
Check out our Ultimate guide of Customer Acquisition Strategies for Your Self-serve Business to learn more about optimizing your self-serve business.
Build relationships with customers
Netflix, the market trendsetter, holds only 19% of the market share today, which is likely to reduce further as the market matures due to regional and global competitors’ arrival in the OTT space.
While this is good news for the OTT market, it also shows customers’ nature to shift from one service to another in this space without batting an eye. As of today, globally, viewers spend an average of 6.8 hours per week consuming OTT video, with the United States topping the national averages at 8.55 hours. This shows that the market is vast and insatiable.
Even though Netflix’s market share has reduced from 96% to 18% from 2008 to 2020, they are one of the top OTT players, followed by Amazon to this date. This shows the growth of the market as well the space in it for new entrants.
But it is not to say that OTT is a bed of roses. New players suffer as more prominent players with more money and a better brand name control the market. So it is wise to enter the OTT space with a strategic plan for churn. Measures on tackling involuntary churn, improving viewing experience, strategic pricing, efficient onboarding, and engagement can come in handy while thinking of OTT churn.
Scale with ease
As already discussed above, the global OTT market is projected to reach $332.52 billion—growing at a CAGR of 16.7% from 2018 to 2025. These trends, coupled with 5G technology, allow many players to enter this market. The OTT market has never been more ready—with the infrastructure in place, tried and tested business success models, more access to public Wi-Fi, and interoperability within devices. It’s no wonder every other week we see a new platform with new content.
OTT players need to be ready to scale their businesses at the drop of a hat, whether it’s because of a new piece of content or to step up when a competitor missed an opportunity. Your system should be flexible for any changes in geography, process, and customer segments. Be ready to move to your audience anywhere in this world by delivering global card experiences and more competent fraud defense.
A year back, we were gawking over baby Yoda from Mandalorian, and now we arrange our shelves with tea sets after binging on Bridgeton. People’s viewing choices change constantly, and so do their perspectives and habits. What’s top ten now easily slides down with upcoming content in a matter of days. Businesses that understand what the customer wants and make sure the customer has a unique but smooth experience stand the test of time.