16 Key OTT Analytics to Consider in Tailoring Your Subscription Video Strategy

The worldwide market for direct-to-consumer subscription video on demand (SVoD) continues to grow. It’s estimated that over 50% of adults use at least one OTT video service and average nearly three SVoD services per household. Global revenues approached $35 billion in 2018, nearly half of which came from the US.

As the SVoD market continues to expand into living rooms across the globe, the industry is becoming increasingly aware of the science of acquiring and retaining subscribers – specifically, the key analytics SVoD providers need to be acutely aware of to gain market share and, ultimately, better visibility into their customer base.

Wicket Labs sits at the forefront of audience insights and analytics for OTT video subscription services. Through our unique relationship with data-driven insights, we share with you 16 key analytics video content providers should be tracking to help data-driven decision-making when it comes to their subscription video businesses.

Acquisition, Conversion, & Retention

In SVoD, the name of the game is customer acquisition – how to attract, convert and retain subscribers. While these three top-of-funnel business functions could be sub-segmented and stand on their own, they are indeed interrelated. For the purpose of this article, we’ve grouped them together and presented the most actionable metrics related to acquiring, converting and retaining subscribers.

  1. Customer Acquisition Cost (CAC)

    In the world of digital content where SVoD companies make their hay, CAC is the price you pay to acquire a new customer. This metric is relative to your business model and strategies but has a valuable relationship with #3 below.

  2. Average Revenue per User (ARPU)

    In the digital media world, ARPU is especially applicable and is calculated as the total revenue divided by the number of subscribers. ARPU is an especially relevant metric for SVoD providers that have multiple service tiers instead of a one-size-fits-all, $10 per month single service tier.

  3. Customer Lifetime Value (CLV)

    One of the primary key performance indicators tracked by Audience Insights Platforms like the Wicket Scorecard is Audience/Customer Lifetime Value or the average gross profit you’ll earn from a single customer over the lifetime of your relationship with them. As we mentioned in our article on Employing an Audience Insights Platform to increase Lifetime Value, cohorts of audience members based on personas, the month a customer signed up, and even the first show they watched can only be compared when there’s a common metric. Lifetime Value fills this need nicely.

  4. CLV/CAC RATIO

    It’s generally accepted that 3:1 ratio of Audience Lifetime Value to Customer Acquisition Cost is a good target for a solid business model. Although it’s arguable, many business pundits suggest that if the ratio is much higher than 4:1, the company should be spending more on customer acquisition. But the ratio can be variable depending on your business.

  5. Free Trial Conversion Rate

    For those subscription services with a free trial model, a buyer-journey focus is simply how many free trials convert into paying customers. From our experience, an acceptable target on free trials is a conversion of around 75% on free trials where payment information is captured in the trial process and the user is auto-enrolled unless they cancel before the trial end date. For frictionless trials where the user isn’t auto-enrolled, conversion rate tends to be much lower at around 30-40%.

  6. Acquisition/Conversion by Marketing Channel

    Traditionally, businesses had to engage a shotgun-style advertising approach and be creative with how they tracked consumer progress through the buying process. Not anymore. Now SVoD services have a wealth of digital marketing channels at their disposal – from social ads to paid search to email campaigns. This makes it simple to calculate acquisition and conversion by specific marketing channels. Obviously, this metric is supremely helpful in determining where to place those marketing dollars.

  7. Marketing Funnel Ratios

    Like many business models, subscription video services need to be keenly aware of their top-of-funnel marketing ratios. In the context of their businesses, SVoD providers want to hone in on how large the top of the funnel really is and the ratios benchmarked through the subscriber journey:

    1. How many prospects are learning about the service?
    2. What percentage of those are trying it?
    3. What percentage of those become paying customers?

Churn

We wrote an article titled Understanding Video Subscription Churn, and in it, we quoted some research done by Cleeng where they said, “Churn is unequivocally the number one problem for most SVoD publishers.”

Indeed, churn is one thing that keeps SVoD company executives up at night. Why? Because it’s ultimately a reflection of the health of your company, the user experience, and your content library.

  1. Churn Rate

    Churn rate is calculated as the number of subscribers that have canceled in the last thirty days divided by the number of total paid subscribers. Reducing churn is of paramount importance because of the old adage that holds true: It costs more to acquire a customer than to retain one. For some interesting ways on how to keep churn rate in check, read our article Tactics for Reducing Subscription Churn.

  2. Abandoned Trial Rate (Breakage)

    This metric indicates the rate at which free trialists cancel before converting into paid customers. While this is simply the inverse of the aforementioned Free Trial Conversion Rate, it has value in the greater context of pre-customer churn.

This metric indicates the rate at which free trialists cancel before converting into paid customers. While this is simply the inverse of the aforementioned Free Trial Conversion Rate, it has value in the greater context of pre-customer churn.

Service/Content Engagement

What drives the metrics in the previous two categories – Acquisition, Conversion, Retention and Churn? The answer is simple… how users are engaging with your content and your service. If users are engaged, of course, they are more likely to convert and remain on the service. The Wicket Scorecard is especially good at tracking user engagement and below you’ll find some truly important metrics to track.

  1. Service/Platform Engagement

    It’s important to know how engaged users are with the functionality of your platform itself. Are they adding content to watch lists? Are they liking and sharing content with their friends on social media? The more features subscribers are using, the more likely they are to remain a subscriber of your service.

  2. Stalled Users

    Pay attention to the percentage of users that have not watched a video in the last 30 days. Someone who is not watching content regularly is more likely to churn, thus it is important to find ways to re-engage them with the service.

  3. Access Devices

    How are users accessing content – mobile phone, smart TV, tablet? We have found that users who view content on multiple devices tend to be more engaged and less likely to churn out. Additionally, we’ve seen that subscribers who watch on a large screen tend to be more engaged and have a higher CLV.

  4. Content Engagement Frequency

    This is a measure of how often users are engaging with your content. Are they watching every evening for a block of a few hours or are users logging viewing time sporadically and infrequently?

  5. Diversity of Content Engaged

    Here, we are looking to determine what types of content users are engaged with. Do users tend to watch only episodic series or is it a mix of series and feature-length films? Do users prefer documentaries or are they consuming more drama? By diving into the diversity of content engaged, it can help providers plan on which content to produce or add to their library to keep subscribers engaged.

  6. Viewing Habits

    An interesting metric to follow is when users are engaging content. Are they taking a lunch break and consuming quick 30-minute episodes of their favorite series? Perhaps, that same user likes to take the weekend to watch movies. By knowing when users are watching, SVoD services can better suggest the right content at the right time.

  7. Content Correlations

    Content correlations also help providers serve up the right content to their users in order to keep them more engaged. We’ve all seen the recommendations on Amazon that say “People who purchased this also purchased this.” The same logic applies to SVoD services that want to keep their user base engaged. People who watched The Walking Dead also tend to like Breaking Bad – and other content correlations – providers can make more meaningful content suggestions within their platforms. You can then take this a step further with the Attention Index we recently released. Not only do people that watch The Walking Dead also tend to watch Breaking Bad, but the Attention Index also shows how well each piece on content is at keeping viewers watching to completion.

With forecasted growth through 2023 for paid SVoD subscriptions, keeping a close eye on these 16 key analytics will help drive your decision-making when it comes to planning and gaining market share for your subscription video business.

Contact us today for a demo to learn how you can easily view many of these analytics in addition to dozens of other metrics in the Wicket Scorecard and utilize the actionable insights to maintain a growing, healthy OTT video business.

 

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