Streaming platforms today are only as good as their last hit series. Subscribers know exactly what they want to watch, and once they’ve finished viewing, they see little reason to stick around for the long term.
In fact, recent research into streaming platform customer preferences conducted by PK found that 62% of respondents have signed up for a streaming service with intent to cancel after viewing a specific show. Adding to the challenge for streaming platforms is that 61% of subscribers tend to keep the number of streaming services they’re subscribed to constant – most customers cancel an existing service when subscribing to a new one.
That means streaming platforms are stuck in a loop that requires constant content development – it’s a highly competitive and expensive zero-sum game just to keep subscribers around, and it only takes one new show on a competitor’s service to cause a mass exodus.
This environment is not unlike the one faced by telcos like Charter or T-Mobile. As telco market competition intensified over the past few decades, customers realized that the core offering they were paying for—network coverage and cellular phones—were largely commoditized. To develop stickiness and drive customer loyalty, telcos have had to continuously boost their offerings with value-added services, new products and customer loyalty tactics aimed at incentivizing retention.
Unless they can find a way to exit the “content wars” and change the stakes of the game, today’s streaming platforms are at risk of a similar fate: A market with a pronounced “switcher” dynamic whereby customers hop from service to service, following the latest content and rich acquisition offers to lure them into a free trial or discounted subscription. Avoiding this trend and mitigating the risk to business will require streaming services to create other forms of value that propel changes in customer behavior and engagement.
To come out on top in the highly competitive streaming platform market, media companies must leverage the underlying principles of loyalty to insulate themselves from customer churn and shift the drivers of subscription renewal and audience growth. At its core, loyalty as a practice is focused on behavior modification, and it can unlock the sea change that streaming services need today.
Loyalty practice #1: Understand and leverage different types of value
The customer value generated by a brand can come from numerous different factors, such as monetary, service, access, recognition, peer-to-peer relationships, partnerships and societal causes. Understanding the various forms of value opens the door to new opportunities to create offerings that expand customers’ perception of the benefits they receive from a service.
In 2021, it will be essential for streaming platforms to examine the wheel of customer value and incorporate new offerings into their membership strategies. Thinking holistically about value and expanding it beyond content enhances and differentiates the experience delivered.
Loyalty practice #2: Create a value ecosystem of strategic partnerships
Strategic partnerships aren’t new to streaming platforms – Disney, for example, partnered with Verizon to give Verizon customers free access to Disney+, Hulu and ESPN+ – but there are opportunities to expand these partnerships beyond transactional interactions and use them to drive new customer behaviors.
Consider the potential of partnerships that create new, value-driving experiences for customers. That could potentially look like Disney+ partnering with GrubHub or DoorDash to offer an inclusive movie-night-at-home experience for its customers, complete with dinner from a favorite restaurant to pair with the latest show or movie release. Stacking partnerships of this nature together alongside content offerings infuses a streaming service into customers’ lives and makes it more difficult for them to quickly replace it with a competitive platform.
Loyalty practice #3: Build awareness that value is derived from more than content
As streaming platforms shift their approach to include new types of value, it’s essential that they pair these changes with new marketing strategies that create awareness around any new value proposition, and drive utilization of that new feature. This “value reinforcement” marketing can help improve perceived value with customers and improve engagement with the breadth of product features and offerings, decreasing churn propensity and improving lifetime value.
Media companies will have to grapple with how value is communicated to customers in order to differentiate themselves. Are new experiences and offerings simply included in an existing subscription, or can a new program or service offering be created that changes behavior and enhances perception of the incremental value delivered? How customer benefits are framed can have a significant impact on how successfully new offerings enable behavior modification.
Streaming platforms don’t have to face the same commoditized fate as telcos. By leveraging loyalty practices, streaming platforms can create a new foundation for powerful relationships with consumers – one that isn’t based solely on content. To learn more about streaming platform customer perceptions and preferences today and see how different platforms compare, read PK’s Media Digital Index 2020 study.
