A look to the future of D2C video
We’re excited to share our first guest post on the Wicket Labs blog and happy to count the author, Mike Berkley, as one of our advisors. Mike has led strategy and development of new businesses for Spotify, MoviePass, Comcast, Viacom, as well as for several startups including two that he founded. This work has given him a tremendous amount of insight into the intersection of innovative media products and evolving subscription models.
The implications of what Mike writes below are really interesting for our customers, and for us here at Wicket Labs as we consider what it would mean to provide actionable insights for a membership business. Lots of food for thought, with many ideas already percolating.
From Subscription to MembershipI distinctly remember on my first day at MoviePass one of my new colleagues told me, “Mike, we don’t call them subscribers, we call them members.” The idea of a membership versus a subscription would eventually become core to the strategy at MoviePass.
Since then I’ve become aware of other services explicitly making this distinction. I’ve seen it quite a lot actually, and I dare say it might be the start of a macro trend.
A subscriber is a someone who receives access to particular goods or services on an ongoing basis for a monthly or annual fee. Whereas a member is someone who belongs to a particular group or community. Those are clearly two different things. What’s the business rationale for turning a subscriber into a member?
Simply put, growing a subscriber base around a single offering is really difficult, especially if the audience for the service is not universal but narrowly defined or niche. Focusing marketing and product strategy on just the service and not the community — and that which connects each user to each other and to the brand — can be a huge missed opportunity. Simply put, tapping into the human need for connection and community is a powerful tool in building and retaining a subscriber base. For the members, inclusion in these “clubs” can be as much about self-expression as it is about the benefits received.
Two examples of media brands that have these membership qualities include WWE and Fox News. These brands have developed very distinct voices and built tight audiences that self-identify with these brands. They also offer direct-to-consumer streaming services. Fox is calling their forthcoming streaming service Fox Nation, emphasizing the communal (or tribal) aspect of membership: “you now belong to a nation of like-minded people.”
A key component to media memberships is offering a diversity of benefits beyond the core content offering. WWE and Fox News do not have the content depth and breadth of a Netflix, Amazon, or Spotify to keep its members engaged and active over the long term with streaming only. Additional benefits of membership often come in the form of exclusive events (MoviePass provided pre-release movie screenings for MP members only), merchandise, access to talent only available to members. Also, they often provide discounts and exclusive offers from partner brands that are endemic to the service (for MoviePass members, discounts at restaurants next to movie theaters, etc). An example of a non-media brand that does all of this very effectively is AAA (American Automobile Association). The value of AAA for a consumer has become as much as about hotel and car rental discounts as it is about getting a tow truck when your car breaks down.
Disney has a strong and distinct voice and tight audience as well as a large volume of content across Disney / Marvel / Pixar / Star Wars. It will be interesting to see if they will treat the forthcoming Disney Plus service purely as a streaming subscription, or as a membership into the Disney universe. If the latter, you could imagine a diversity of Disney benefits beyond streaming movies and shows, such as VIP treatment at their parks and cruises, and discounts on Disney consumer products, etc. They also could do something even more aggressive and carve out a 1-week early access window to all of their theatrical movie releases such that Disney Plus members can go see the new Star Wars or Marvel movie in theaters a week before everyone else. That “ancillary” benefit alone could drive millions of subscribers!
I believe this trend toward membership will become even more pronounced in 2019, as more and more media companies experiment with direct-to-consumer streaming services. This will, of course, have important implications about what KPI’s will matter most for driving retention and lifetime value of a member. It is no longer just about content engagement.