How Data Supports Growth at Each Phase for SVoD Services

With the pending launch of Disney+[1] and restructure of WarnerMedia streaming video services under HBO Max[2], there has been a lot of talk about the coming battle for subscribers between the SVoD video giants. Where does that leave the other services already in-market or looking to launch?

According to a post on nScreenMedia, when it comes to the continued growth of the OTT video market, there is still plenty of room for smaller SVoD services[3] in consumers’ living rooms and mobile devices.

“Smaller services are seeing significant growth. We see 20% growth across all the services we track. None are declining.”
– Sarah Henschel, Senior Research Analyst, IHS Markit

Last year, Parrot Analytics released their report, The four phases of global SVOD subscription growth[4] based on the development of original content to be the main driver of member subscriptions. While we agree that content is king, having the best content is only a piece of the puzzle. In one of our recent blog posts, Balancing Your Video Library, we noted that “Cost, ease of use, and content are the strongest influencers when users make decisions about subscribing to streaming platforms.”

SVoD growth & usage metrics

Fig. 1 – SVoD growth & usage metrics

Make Informed, Data-Driven Decisions

Regardless of which stage your SVoD service is in, the Wicket Scorecard provides different levels of utility to help you reach the next phase. Implementing recommended foundational work, paying attention to specific key metrics, in addition to making informed, data-driven decisions can help your streaming service grow to its full potential and remain a sustainable business for many years to come.

Below are some tips to utilize as you are growing your video service. Not meant to be a comprehensive, one-size fits all guide, this should serve as a list of some of the important details to focus on while working through each phase.

SVoD Service Phases of Growth

Phases of subscriber growth for SVoD services

Fig. 2 – Phases of subscriber growth for SVoD services

Launch: 0-25,000 subs

Focus

Initially, acquisition with a high conversion rate is the top priority and a key to success. Later, as your customer base begins to grow, acquisition coupled with strong engagement become the top priorities.

Fans love your original content OR maybe you’ve secured licensing for a library of content with a raving fanbase. You’ve done your research and chosen the online video platform to support your SVoD service. You complete a business plan that looks like a track to success. Then it’s time to launch your streaming service and test the digital waters!

Day 1 Insights

Too often, reporting and analytics is the last component that gets thought of when launching a new business, but it’s never too early to collect and organize data. Getting teams into the habit of looking at relevant KPIs (and comparing to Benchmarks) will help guide priorities in managing your video service.

Two key factors to consider in order to successfully avoid standard pitfalls in monitoring the growth of your new business are:

  1. Data Identification:  We like to work with our customers to better understand which data sources lead to the most relevant analytics to yield the most effective audience insights platform.
  2. Data Structure: Next tackle the upfront work of prioritizing a content metadata strategy, which will help you avoid many problems that plague video services in later stages of development. Inconsistent metadata can create frustrating user experiences and may create recommendations that are irrelevant to users, which in turn will impact revenues.

Implementing best practices is essential to helping emerging video services down the path to success.

Grow Your Subs

In order to grow your subscriber base, it is critical to understand which marketing channels are most effective. The Customer Status per Source Wicket shows how each marketing source is performing across the complete customer lifecycle. This will show not only which sources are most effective at driving trials into your service but will illustrate which source is best at converting trials to paying subscribers and ultimately which is most effective at keeping them subscribed long-term, thus optimizing your marketing channels by informing where to best spend your promotional dollars.

Metrics to Monitor

  • Use Trial Drivers for content promotion campaigns. Determine which content correlates best with successful conversions and use it for acquisition campaigns
  • Identify stalled trialists and promote engagement with specific content. You can leverage this with subscriber export from the Content Explorer
  • Watch conversion rate over time to make sure it is trending positively
  • Run LTV/CHI®️ score based Lookalike campaigns for happy customers in Facebook
  • Identify stalled users and promote engagement with content campaigns

Growth: 25,000-100,000 subs

Focus

Continue growth of subscriber numbers, intervene at-risk subscribers and promote reconnects.

You have a real, viable subscription service with a proven business model backed by a solid marketing plan informed by the initial launch phase driving free trials and conversions. You’ve identified which content is driving those trials and converting subscribers. Continue to test and refine in this area.

Grow & Retain Your Subs

Since your video service has been active and growing, you now have enough history under your belt to make sure you’ve established a healthy LTV for your subscribers. How does this compare to industry benchmarks?

Metrics to Monitor

  • Use CHI for risk evaluation, and reason codes for intervention
  • Look at voluntary vs. involuntary churn and actively address both
  • Monitor churn across plans, channels, viewing devices and focus on addressing anomalies, and/or driving subscribers towards lower churn scenarios
  • Leverage Attention Index for promotion/curation

Attract and Retain: 100,000-250,000 subs

Focus

Drive the business model to sustainability.

The video service is well-utilized. Engagement is up. Subscribers continue to grow and you have a handle on churn; a good understanding of why it happens and you’re actively pursuing solutions to keep it at a minimum. Now things get interesting! You can staff up and get creative with user experience and testing new ways to engage subscribers.

Grow & Retain Your Subs

We’ve shown that subscribers who primarily watch on TV-connected devices watch 2.5x more and churn at 1/2 of the rate of those who watch primarily watch on mobile devices. Consider how you can encourage subscribers to move to “lean back” devices. Additionally, involuntary churn represents 31% of subscriber losses. Monitor this with benchmarks and keep to a minimum.

Metrics to Monitor

Scale: 250,000+ subs

Focus

Now the video service is really beginning to scale up.

You have more complex data and a lot of it. Marketing budgets increase and you can afford more campaigns, A/B testing, a more diversified service that now has value-added features to offer subscribers.

Grow & Retain Your Subs

Be sure to invest in content/genres that are driving the most consumption in the service. Now that the service is well established, it may be time to consider third-party distribution in order to gain more exposure for the service. Run marketing campaigns to keep subscribers engaged or win-back former subscribers with enticing new content or new seasons of content they were fans of in the past. Continuously test, scale, and optimize to dominate your market niché.

Metrics to Monitor

  • Customers by Plan – Upsell through value-add
  • Continually measure engagement with Video Views Per Session and Number of Series Watched
  • Use the Attention index to find “hidden gems;” content with high engagement but low viewership
  • Utilize Library Breakdown to confirm your content offering matches the consumption of your audience
  • Identify cross-over content with Content Explorer to keep people interested at the end of a series

Small investments up front pay dividends down the road.

As you can see, making the small investment up front to establish clean datasets that compliment your video service can pay incredible dividends down the road throughout the lifecycle of your business. Because each video service is unique in its content offering, business model, technology stack, etc., these tips are meant to be more of an informational guide. But we’re here to help! If you would like to have a more “custom-fit” solution where our team and our product can analyze your data to give you personalized recommendations and guidelines, let us know if we can be of help, no matter what phase your video business is in.

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