As of last year, OTT churn was at an all-time high – and growing. Research from Parks Associates found that subscriber drop-off for video streaming services in the US alone peaked at 35%, a rise of 7% compared to 2018. What is particularly interesting is one of the main reasons for churn: subscribers are saying they switch because they cannot find anything they want to watch.
Part of this is caused by the ever-increasing content libraries of the big three SVOD players – Netflix, Hulu, and Amazon Prime. This has led subscriber expectations to shoot through the roof, negatively affecting smaller players. Yet there is still more content on the average video service than a viewer could hope to watch in a lifetime. Even niche platforms often have content libraries that can run into the hundreds or thousands of assets at any point.
So, what do consumers really mean when they say there is nothing to watch? And how does that change the role of catalog depth in tackling OTT churn?
Understanding the new subscriber mentality
Catalog depth will always be important. In the early days of VOD, it was a critical factor for subscriber acquisition and retention strategies – and, in many ways, still is. By extension, original series are rightly regarded as a key differentiator. They are a powerful tool for getting new subscribers through the door. However, as the research shows, catalog depth alone, given heightened SVOD competition and the surge of AVOD services, doesn’t guarantee the loyalty of hard-earned subscribers in the long term. Nor does it show the full picture in terms of total value or appeal of an OTT service.
When subscribers say there is nothing to watch, what they really mean is they cannot find what they’re looking for in a sea of content, having already consumed any original series on offer. Yet it is possible for any OTT service to become more ‘sticky’ without having to invest on a Netflix-esque scale in terms of available assets.
This depends on striking a stronger balance between offering content the audience wants to watch and enhancing engagement. By better understanding viewer behavior, tracking how preferences change over time, understanding what content is needed to keep the user base coming back for more, and then personalizing the subscriber experience accordingly, retention rates can be multiplied.
Content is king, but metrics are queen
As a result, the old adage of ‘content is king’ is evolving. While content is still king, actionable insights and metrics are now queen of the video streaming castle. Recognizing the value of existing content on a streaming service and identifying how assets can be pieced together to keep subscribers engaged is key.
For this, we need to look beyond basic metrics like total number of streaming hours. After all, the number of hits a video asset has received is not an accurate measure of its overall performance. It is an indicator and becomes a highly useful metric when combined with other data, but it doesn’t tell the whole story. To become more ‘sticky’, OTT businesses must adopt a more nuanced approach that takes into account subscriber attention.
This means measuring the overall effectiveness of each asset to get a clearer read on how many viewers tuned out quickly. When compared against those who stuck around to watch at least 75% of the video, it is possible to know whether content being promoted is targeted and aligned with what subscribers are looking for. And, in turn, whether that content truly engages them or not.
The added benefit of an approach like this is subscriber attention insights can also be used to uncover hidden gems – i.e. content that hasn’t yet received many views but has a high attention index. Discovering and promoting these gems can go a long way towards keeping viewers wrapped up in the ecosystem and feeling like there is a steady stream of relevant content for them.
How platform metrics enhance content value
Streaming services that want to retain and grow their user base among heightened competition need access to an aggregated data dashboard to unlock these insights.
A data dashboard takes the guesswork out of identifying content value in this way. It provides easy-to-access metrics into how content is consumed, how effective individual pieces of content are at keeping users engaged, what assets drive the highest rating of subscriber loyalty, and more. This offers powerful predictive insights that OTT players can use to make the right investments, creating or licensing new content that will satisfy viewer needs more effectively than the competition.
The insights uncovered by a data dashboard like the Wicket Scorecard can also be a reactive churn prevention measure. Using content consumption metrics and engagement data, these platforms can make data-backed recommendations of how to best approach a customer that is ready to churn.
It is yet another way to make existing content libraries work harder by capturing, structuring, and analyzing data to deliver insights that can enhance the bottom line.
Making user insights your north star
Ultimately, adopting a data-driven approach to uncover the hidden value of your existing content library, using subscriber attention metrics to develop a baseline for content performance, and taking action to enhance the user experience based on that insight, is a far stronger way to tackle churn than simply relying on catalog depth.
This is particularly important given the current landscape as the size of the pie for all SVOD services is increasing. Not least because the US domestic box office brought in just $5,000 from 20-26 March, compared to $204,000,000 in the same week last year. Social distancing rules currently being followed mean that a lot of money previously spent on the cinema is in many cases now going elsewhere (read: video streaming services).
However, in the long term, OTT services that are not ‘sticky’ will face significant trial breakage and churn risk – particularly as subscription fatigue is a pressing issue. Lowering churn and increasing subscriber LTV in what might become the new normal means creating content and engagement funnels capable of ticking the right boxes for their given audience. And that means getting a better handle on both platform and usage data.
Get in touch to discover how the Wicket Scorecard can take your content engagement and platform data and turn it into churn-busting actionable insights.
Tags: actionable insights • artificial intelligence • attention index • audience insights platform • churn • content library • lost customers • machine learning • OTT • SVoD