Streaming services now face ‘subscription fatigue’ after pandemic overload. At the height of lockdowns, U.S. residents increased their streaming subscriptions to an average of 5.2 services per household. While that number dropped to only 4.3 in 2021, subscribership saw a modest increase to 4.6 in April 2022. However, as inflation continues to negatively impact household discretionary income consumers have started to rethink their finances, and subscriptions may be the first-place people go to cut costs. What many subscription-based media businesses are coming to realize is that it’s difficult to predict who is safe and who is on the chopping block. This is perhaps best demonstrated by recent news from subscription giant Netflix who just reported a decrease of 200,000 subscribers in the first three months of 2022. The decline marks the first time in 10 years that the service has lost subscribers, and the company warned shareholders that the trend is likely to continue. The only difference may be that Netflix won’t be the only streaming service reporting these kinds of declines moving forward. So, what can streamers do?
While many of us have grown accustomed to the convenience of subscriptions, we are probably going to keep those subscriptions that actively deliver value. To keep subscribers from going to competitors or simply canceling for good, providers must be creative in providing valuable services and checkout experiences for their customers. At Kognitiv, we think that embracing a collaborative approach to rewarding subscriber loyalty is one way to ensure that cancellations are only a concern for the competition.
Most subscription-based media propositions spend most of their efforts on recruitment and renewal. Few focus on the period between those two subscription stages. But that moment is the payoff where value needs to be delivered daily. For most streamers the only content that they can use to reward subscribers is their programming. But as is the case with Netflix, even the long-awaited return of a popular series like Stranger Things isn’t always enough to keep subscribers on board. Members need to regularly feel that their membership is delivering value that exceeds their monthly subscription fees. Providing that, and doing it in a way that feels personalized, meaningful, and regular happens when streamers collaborate with non-competitive peer brands.
When streaming services engage in an “all party data” approach to their subscribers, they begin to know more than their name and email. They begin to understand what motivates these viewers beyond their screens. Where their passions reside, what their aspirations look like, and they begin to establish a comprehensive viewer ID. That allows for them to partner with brands in ways that are strategic and efficient, extending rewards to subscribers that they could never offer on their own. This creates a different kind of connection to the subscriber that moves beyond programming and the fickleness a viewer may have at any given moment to the programming menu. Better yet, these kinds of collaborative offerings can be tied to programming, be gamified, and increase engagement with shows that have broader impacts on franchises and future offerings. It’s a customized approach to rewarding loyalty that better ensures customers remain loyal subscribers for years to come and develop a deeper more connected relationship to the programming they love.