According to the consulting firm, Strategy Analytics, global video-on-demand subscriptions are set to grow in 2020 compared to pre-pandemic models.
The consulting firm forecasts 949 million paid subscriptions globally by the end of 2020, which represents an increase of 47 million compared with earlier forecasts.
This seems like good news in the short term for streaming businesses, but there are some considerations worth mentioning:
– What streamers are likely to see is a significant increase in the number of trial subscriptions, not necessarily paid subscriptions. Whether streaming businesses will be able to capitalize on this special momentum or not will be determined by their ability to convert these additional unexpected trial users into paid users.
– Engagement and retention will be more important than ever. When quarantine measures around the world are lifted and people venture out of home again, the risk of churn will be higher than the pre-COVID-19 era.
– The global economic crisis that is expected to follow will force people to choose the streaming service that most closely delivers what they want, so the factors that make a streaming provider stand out from its competitors will make the difference when users are prioritizing their paid streaming subscriptions.
So, with these facts on the table, what should streaming services focus on to maximize their ROI?
In my opinion, priorities should change depending on if your video service is in a pandemic or post-pandemic phase territory.
The coronavirus pandemic is global, but countries will come out of the storm at different times, so it is worthwhile to define strategies based on where your video service operates:
Pandemic Phase: Conversion, Conversion, and Conversion
The right conversion strategy is a growth accelerator and will have a significant impact on your business profitability.
With increasing numbers of trial users landing on your video service, there will be more and more information available about your video trial users’ behavior.
Make use of machine learning algorithms to identify those trial users that are highly likely to convert into paying users. You can then focus your acquisition efforts on this segment, targeting these high-potential conversion candidates.
By feeding this data into your video service’s CRM, customer support personnel will be able to focus on those users who are high-probability/high-value conversion candidates to maximize the number of trial users converted into paying subscribers.
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Post-Pandemic Phase: Retention, Retention, Retention
After the pandemic threshold peaks and people return to their jobs and life as normal, they will likely face issues related to the economic crisis, and they will be forced to make choices about their entertainment expenses. It is very likely that if they have three or more subscription services, they will choose to keep some and cancel others.
Understanding in advance the users who are highly likely to cancel their service and the main reasons why will allow you to focus your retention efforts on this segment using the right retention campaign. This will undoubtedly reduce your churn rate and improve your overall business performance.
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New Regular Business Phase: Engagement, Engagement, Engagement
Once your video service viewers are back into the groove of their “new reality” and have adjusted their entertainment budgets, they will be especially sensitive to the value they get from their entertainment services.
The following are key pillars for any video service and will be more important than ever in influencing your audience’s perception about the value your video service provides and if it is worthwhile subscribing or not.
The content catalog will of course still be the main driver sustaining audience engagement, but how you display this content catalog and make the content available to the audience will influence whether they think it is worth their time and money or not. Only with effective, data-driven management can the following critical questions be answered quickly and accurately.
- Which content attracts the most viewers to my service?
- How can I simplify content search and discovery for my customers?
- Which content is the worst performing?
- Is my user experience aligned with viewer content demand?
- Do I have the content catalog that my viewers want?
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Audience segmentation and understanding user behavior relationships across the customer base will be essential to providing personalized value to your video users.
Identifying relevant user clusters for service personalization and targeted marketing activities can have a significant impact on your business outcomes.
The key to addressing this challenge is to identify user data groups aggregated by similarities.
- What are my customers watching?
- How long do my customers use my service?
- To what extent do my customers enjoy the content they watch?
- Where is my content being watched?
- How often are people binge-watching?
- How is Live TV watched?
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User experience will have an increasingly important impact on user satisfaction. Gaining insight into the performance of your video service’s user experience must be incorporated as a core part of the product management process. It should drive activities like product feature prioritization and changes to the user experience that impact the overall customer engagement, thus helping detect UX inefficiencies and enhancing it with a data-driven approach.
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