The subscription video-on-demand (SVOD) market is becoming a fiercely competitive field as customers seek greater choice in their service options.
A survey of 2,007 U.S. online consumers conducted by IBB Consulting (recently acquired by Accenture Strategy) found that half of paid over-the-top (OTT) users subscribe to two or more services — and nearly a third plan to subscribe to an additional offering within six months. While opportunity exists, there are significant technical, marketing and creative challenges ahead when it comes to turning promise of growth into new subscribers in an increasingly crowded landscape.
According to new research from Accenture Strategy (based on a survey of 24,877 consumers across 33 countries), 14% of consumers globally have switched online entertainment service providers in the past year. However, only 37% are satisfied with the providers they subscribe to, and just more than a quarter (26%) of them express loyalty. Standing out from a growing pack of competitors will demand full integration of data-driven retention and acquisition technologies, marketing processes and strategies to usher the era of “hyper-relevance,” in which reams of customer data will be used to deliver uniquely tailored and highly customized experiences.
The need for this internal transformation comes as the SVOD market itself is becoming ever more complex and dynamic, with users transforming into multidimensional moving targets. Every SVOD service — no matter the size — must collect and act upon millions of data points that reveal a series of distinct touch points at which prospects can ultimately become subscribers, as well as key “moments of truth” for reinforcing loyalty among existing ones.
As high ROI tactics repeatedly prove, central to retention and acquisition campaigns alike will be a focused, cross-functional team effort around rapid testing and analytics, as well as highly-automated systems capable of agile, real-time change.
A Data-Driven Acquisition Journey
To turn a consumer into a subscriber, the job of the SVOD provider is to guide a journey to awareness, exposure to content and relevance. Data must be at the heart of these efforts, informing targeting approaches and driving tailored strategies. Moreover, providers must have a laser focus on ROI from meaningful investments, with the agility to rapidly test, learn and pivot.
Actionable insights will enable providers to isolate micro-segments that should inform the acquisition marketing strategies across all channels. The most promising targets are those who have demonstrated likelihood to subscribe through past actions — for instance, subscribers of related services, those who have opted into emails or “lookalikes” to existing heavy users. This group can be engaged or reengaged through tactics such as a compelling video-based landing page.
Targeting the broader pool of nonsubscribers requires a comprehensive multiplatform approach. This ranges from targeted engagement via email, paid media and social, to offline clubs, mailing lists and other avenues. Efforts must be systematically approached with attribution data.
Retain, Retain, Retain
A well-engineered retention machine knows subscribers’ content engagement, social media activity, device graph, which creative approaches perform best, and which add-on services work with which segments — among a myriad of other details. And, it provides triggers on which retention actions should be taken when, all while delivering the insights needed to create organic, personalized relationships with each subscriber.
Companies that get it right will benefit from high conversion and retention rates, lower cost per acquisition and greater ROI on marketing spend. And they will be empowered to be forward-thinking by the ability to automate and quicken predictive models and attribution, accelerate testing and learning, and increase the efficiency and scale of marketing system investments.
SVOD providers can take three key steps to position for success in today’s changing marketplace:
• Leverage data for high personalization: SVOD is a natural programming format in a market where customers desire highly-personalized content. But to thrive, companies must leverage a rich set of data insights to find sophisticated, automated and highly tailored ways to find, appeal to, win over and ultimately retain subscribers.
• Create predictive models: Beyond reactive tactics such as customer feedback through surveys, SVOD providers must data from a 360-degree view of customer interactions for predictive acquisition and retention campaigns across channels.
• Drive a corporate mindset shift: It’s up to the C-suite and other major influencers to support this leap forward by establishing collaborative, cross-functional corporate structures that enable real-time data sharing and activation across the enterprise, and by pioneering technology investments that support business outcomes.
As competition soars, unlocking the potential of data to drive highly sophisticated and tailored approaches to subscriber engagement is crucial. Doing so requires a constant process of data integration and targeting, creative optimization, execution, measurement, optimization of feedback and retargeting. This rapid cycle yields ever-sharper actionable insights that can arm companies with a significant competitive advantage — resulting in more loyal customers, lower costs and long-term profitability along their own journey of transformation.
The key differentiator that powers significant SVOD growth in the hyper-relevance future will be insight driven and informed by data.
Jonathan Weitz is managing director of Accenture Strategy.
