What Happens When Your OTT Subscriber Acquisition Growth Slows Down?
Through our experience in helping some of the leading OTT services in the world grow to the levels they’re at today, we’ve noticed that there will always be a point within the lifecycle of that business when growth starts to decline.
You know the familiar story. There’s an allocated budget in marketing devoted to acquiring new subscribers, whether that’s via online or offline channels. You invest heavily in subscriber acquisition when you launch a streaming service, experiencing strong growth initially but there will be a point where growth begins to plateau and even stagnate in some instances.
What do you do now? When you’ve potentially saturated your audience, what’s the next step? How can revenues still climb as growth slows down?
In this pair of blogs, we discuss two key areas worth consideration when launching or enhancing an OTT service.
- Subscriber acquisition
- Subscriber relationship management & churn reduction
Traditional subscriber acquisition tactics
Even XL services like NOW TV, who invest millions in marketing and subscriber acquisition, see growth slow down eventually. When you have saturated your subscription market, effective subscriber relationship management and customer retention tools are paramount to keeping subscribers on your service. Equally, providing additional products and more granularity around service offerings and content bundles will help keep your viewers remaining connected to a service they love, along with a great user experience.
There are many tried and tested promotional methods focused on subscriber acquisition when launching an OTT service, summarized below. But how can you maximize the marketing budget allocated to this initiative?
Offers & incentives
We’ve helped big companies like Sky increase subscriber acquisition through low start offers, free trials, % discounts, box-proposition, partner programmes, group discounts and more.
- Low start offers incentivize prospective customers with a reduction in service cost for a limited period, for example, 50% off for the first three months. In our experience, these work quite well in acquiring new subscribers and ensure that new customers are still generating a proportion of revenue for your service, even if they aren’t paying full price.
- Free trials with payment details require the user to submit payment information in order to freely access your content for a limited time before tripping into paid auto renew processes. If you correctly optimize your value exchange communications, for example, providing free content for 30 days in exchange for card details, this method can be hugely successful for acquiring new subscribers. Despite many of your board members’ fears, subscribers acquired using this tactic DO tend to convert and remain subscribed to the VOD service for many months after rather than terminating their contract shortly before their free trial ends.
- Voucher codes are online or offline promotional offers that enable discounts or free trials when redeemed on checkout or over the phone. The advantage of voucher codes is that they can be created and disseminated at short notice and sent out to your database via email marketing or even in print ads/billboards/digital programmatic advertising. You can also personalize voucher codes and their redemption properties. Voucher codes specific to a marketing channel enable you to track the success of converting new subscribers from that channel. You can use this data to inform your marketing strategy and invest more marketing budget in the tactics that have highest conversion rates for your users.
Partner referrals & partnerships
Partnerships are a great way to get subscribers through the door. By analysing your audience data, you can tap into the interests of your target demographic and offer third-party promotions to incentivize subscriptions to your service. Perhaps your OTT service could partner with cinemas, food & drink brands (think popcorn!), or even glasses/contact lens companies – think outside the box! They could offer free passes or physical voucher codes to your OTT service included with their physical products. Sports content providers could send such offers to season ticket holders, who are likely to be the most loyal and therefore spend the most money on staying connected to their team, or include with match day programmes.
Communicating OTT subscription offers on the packaging of physical products gets viewers interested in your service early on. This is most logical with TV manufacturers: a brand-new TV purchased by a customer eager to consume fresh video content is perfectly situated to deliver marketing messages to feed new customers into the top of the subscription lifecycle. For example, Sky partnered with LG to drive NOW TV growth, with day passes enclosed in the packaging. When customers bought an LG Smart TV they received a free 3 month Sky Movies Pass and 7 Sky Sports Day Passes.
New and emerging subscriber acquisition tactics
Subscriber acquisition success is not exclusively measured through offers, incentives and promotions in isolation: it’s also through good user experience. Let’s look at a few of the ways you can improve UX to increase acquisition.
Optimize your sign-up and registration process for the mobile customer. Elegant, fast and slick mobile experiences signal an equal impression of your content and business.
Consumers signing-up to an OTT streaming service via mobile want to access content easily and conveniently. If your sign-up process is anything but logical and efficient, what are you communicating about the quality of your streaming service to your customers? With the increasing proportion of customers choosing to sign-up to OTT services via mobile or tablet, it would be foolish not to prioritize making your subscription acquisition strategy mobile-first. This means ensuring the registration process remains slick and consistent across multiple devices with minimal barriers to purchase. Optimising the UX for the customer will lead to more subscribers through the door. Mobile-first optimisation is particularly important as customers move through their journey of initial interest, to conversion, and then repeat loyal customer mobile interactions. This will increasingly play a larger part in driving your recurring revenue stream.
Speed up the registration process by offering consumers the option of signing-up via single/social sign-on. Have one account for all areas of your business to reduce consumer headaches in remembering separate payment and login information for multiple accounts. This works particularly well for sports OTT providers who may also want to upsell and cross-sell to fans interested in purchasing merchandise, match-day tickets, hospitality boxes, literature etc.
Metered Video-on-Demand (MVOD)
Widely adopted in the publishing industry, content metering has helped publishers balance the debate as to what is more valuable to a content provider: direct-to-consumer (D2C) revenues through paid content, or maximising visitor traffic to keep advertising revenues high? By limiting access to content, freemium business models can tease visiting users with content which incentivizes them to convert to your paid or registered services once access is denied. We are now helping the sports industry to engage fans all around the world with metered access controls applied to their digital and video assets. Broadcasters can meter access based on many variables such as a user’s IP, time of day, asset or article counts or by content type. This should be of particular interest to broadcasters that have historically been free-to-air and are trying to persuade users to convert to paid or registered services.
Whilst saturation of new subscribers may seem inevitable, revenues can still grow. If you know your audience, their behaviors and content interests, you can create targeted offers to increase your pool of subscribers at the top of the subscription lifecycle. Reduce barriers to purchase at every opportunity for a slick and simple user journey and consider employing innovative business models such as freemium and metered access. If you can put your customer at the heart of your subscription strategy and respond to consumer demand in the market with flexibility and agility, your streaming service will be able to thrive and your recurring revenue stream grow.
Stay tuned for the next blog in this pair which will cover the other side of the subscription lifecycle – what happens when subscribers start to churn?
MPP Global will be attending IBC in Amsterdam with a team of TV Specialists. If you would like to discuss OTT subscriber acquisition tactics in more depth, please book a meeting.