Media executives can be forgiven for being in a tailspin. Consumers’ viewing habits are changing on a dime. The latest piece of research, from Amdocs Media, contradicts another recent report from Deloitte at the same time as elaborating on one of its central findings. The perfect subscription package might not be one that incorporates lots of fresh original TV shows and movies. It’s that — plus one that offers an a la carte menu of digital lifestyle services from gaming to fitness to shopping.
Amdocs’ survey of 1000 US streamers revealed that competitive pricing alone isn’t the primary driver supporting retention and new subscriber acquisition.
That goes against Deloitte’s conclusion that cost, not content, was the chief though not only cause of churn from VOD service subscriptions.
While cost is still a factor with consumers, it’s no longer the most significant reason they stick around. Per Amdocs, when asked what drives their loyalty to video streaming services, almost half declared the amount of content (49%), followed by the quality of the content (45%) and then pricing (38%).
CHARTING THE GLOBAL MARKETPLACE:
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What’s more, OTT video services are more accretive to a household’s existing TV packages than a binary like for like cord cutting for SVOD take-up. A third of consumers, extrapolates this survey, added a new SVOD sub while only 8% cancelled a satellite/cable subscription. This indicates that cord-cutting options are more of an addition to consumers’ personal content bundles, rather than a replacement.
“Notably, consumers are very interested in selecting specific shows from different providers to create a unique content bundle, and are even willing to pay more for this feature,” finds Amdocs’ Darcy Antonellis, Head of Amdocs Media, and CEO at Amdocs parent Vubiquity.
Best of Breed Optionality
This is supported by other evidence of our confined at home experience. It seems that more of us have caught the habit of paying for a whole range of streaming services ranging from fitness (like Peloton) and remote learning alongside the standard digital media services such as gaming, video and music.
Online gaming has shown the most dramatic increase, with 49% of those polled saying they are playing more than before the pandemic. 45% also spend at least $25 per month on services like PlayStation Plus, Xbox All Access and GamePass, Stadia and Nintendo Online.
But it’s the emergence of popularity in other digital subscription services such as eLearning (36%), wellness and e-Health that catches the eye. A third of respondents have added at least one subscription of these since the start of the pandemic.
This is important if you believe as Amdocs does that these newfound experiences will lead to a “deeper, diverse partner ecosystem”, providing consumers “optionality” of best-of-breed subscription offerings. Each consumer will have their own idea of what their personalized bundle looks like, and that’s the beauty of it; this solution will give consumers the control to design a streaming service that’s unique to their hobbies and interests.
“COVID-19 has changed the consumer mindset to getting what they want without leaving the house,” says Antonellis. “This brings an opportunity for service providers to bundle other popular digital services like online gaming, delivery services, remote work options, and eLearning.”
Diversified and Flexible Bundles
Deloitte identified something similar in its survey but confined its argument to media and entertainment services.
“Media companies should be prepared to evolve and take a diversified approach, starting with gaming,” Deloitte advised. “The services most likely to thrive [will] aggregate a lot of entertainment, not just their own, and offer different models to different kinds of subscribers.”
Customers seem to be calling for diversified and flexible bundles that meet their evolving digital lifestyle, but are streaming services ready to provide an all-in-one solution, giving customers access to everything they need in one place?
“There’s an opportunity here,” argues Antonellis, “for providers to improve their service offerings and their customers’ experiences by sharing content that’s relevant to them, whether that’s a new TV show, a new song or even a new game, all in one place. Consumers are even willing to pay more for specific content if it meant they could create the “perfect” bundle pulled from a diverse ecosystem of offerings.”
While it’s clear that it’s important to give customers plenty of choice, there’s a fine line between just enough, and too much… get it right and service providers are presented with a golden opportunity.