Subscription Video on Demand (SVOD) has evolved dramatically and is increasing in popularity as more streaming applications like Disney+ and Apple TV+ launch their services. Millions of people have “cut the cord” and are now getting their video entertainment from dozens of these video streaming platforms.
Some are advertisement driven to generate revenue but the most profitable services are subscription-based. However, there is also a growing sense of consumer Subscription Fatigue.
SVOD for Media and Entertainment billing will remain a driving force in generating revenue for these companies. Streaming media companies are making every effort to differentiate between competing services with limited success.
The reason for this is that to the consumer it’s all starting to look the same. With the exception of unique content, the programming is similar, user interfaces are similar, even the billing options (SVOD, TVOD, AVOD) are the same. How do you improve free trial conversions and reduce churn, while also driving differentiation?
To address this lack of differentiation streaming media companies have been focused on dynamic User Experiences. This is where two people in the same household can have different programming options offered when they log into their accounts based on genre, demographics and previous viewing habits. Here again, this is becoming a common technique. So how does your service stand out?
Harvard Business Review recently found that "Streaming services are violating rule number one in pricing/packaging: meet the needs of customers. Viewers want to watch their favorite shows – and minimize paying for programs that they’re not."
Just as important, if rival streaming services start offering cheaper options (e.g. metered plans or a la carte), those that don’t follow suit will be put at a significant competitive disadvantage.
Harvard's findings were confirmed in a recent Tivo study that found 69.9% of consumers surveyed want some type of consumption payment model.
The reason that the focus has been solely on the front-end experience, is because streaming media providers typically have had no other pricing options to differentiate their services.
Their business models were designed around SVOD, TVOD and AVOD or some combination thereof. If your billing system can’t support new billing models to keep up with the rapidly changing market demands then you simply can’t sell these new options.
Companies that are locking themselves in with billing platforms that only support SVOD, TVOD and AVOD will be shut out of opportunities when the media and entertainment vertical shifts as we have seen in almost every other vertical market today.
Telecommunications, cloud services, auto insurance, gym memberships are all offering pay-as-you-go or consumption billing models. LogiSense's metered usage in combination with subscriptions is a good way of improving free trial conversions, reducing churn and giving consumers the differentiation they crave.
Customers can have multiple streaming applications to watch their favourite shows without paying a flat monthly recurring fee for each service.
The Wall Street Journal recently confirmed that consumers are increasingly frustrated by the growing number of subscriptions and services required just to watch the programs they want.
Give consumers what they demand. Which is control of their recurring billing via a mix of subscriptions and consumption models similar to the mobile billing model. These models can help media companies gain more consumers and increase revenues. Streaming media consumers are also mobile billing consumers who are already familiar with this model.
LogiSense allows you to add billing alternatives that will help differentiate your backend, as well as your front end, to overcome resistance and subscription fatigue. Instead of having multiple subscriptions with recurring monthly charges that become difficult to manage, think about the possibility of having “buckets of hours” that give consumers control of what they are charged.
Charging a minimal fixed fee of $2.99 as an example to access the system, and then purchase buckets of time that rollover month-to-month.
The use cases are numerous and the differentiation is solid. Drive more revenue by improved free trial conversions, and reduce churn by offering new ways to pay on top of your current subscription billing models. This is the key to a profitable streaming media service. LogiSense has all the tools and resources needed to embrace the Usage Economy™, an antidote to Subscription Fatigue.