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Issue link: https://digital.macdirectory.com/i/1471136
Today, some of the best content in the world is as close as a few clicks for us since we have the best five subscription services (our opinion) available and the two best ad-supported services. That also means we have too many video streaming services. We come for the content and leave for the cost just like households around the globe. Well, you don’t exactly leave; you drop one service and pick up another that has more of the content you want. And later probably return. It’s a little like the pony express in the old West. Ride a horse – hard – for a period of time and then jump onto a fresh one and continue your entertainment journey. Of course, like the horse you left at the station, it’s not that you disliked the subscription service, you just wanted “a change” to something “new,” “fresh,” “different”. On your return trip, you find you’re getting tired of that new horse, so you jump onto the horse you left awhile back and ride on happy with the new/old service. In the entertainment and communications industries, it’s called churn where you drop one service for another and then later reverse the process. It’s far from new – the phone guy has seen it for years - and it costs streaming services millions because it’s more difficult to recoup their subscriber acquisition costs. The old rule of thumb was that it cost 5x more to get a new customer than to keep an existing customer. That’s because streamers must build new content from the ground up to personalize it and appeal to a new subscriber. The cost could be as much as 500 percent greater. Over the past few years, we’ve discussed this issue with Allan McLennan, CEP/Media, Head of M&E North America, Atos, multiple times and he always points to the same issue. “Consumers are overwhelmed by the sheer volume of content from streaming video providers and are increasingly frustrated with the efforts needed to access it.” Growth for the major North American subscription services like Netflix, Amazon, Disney, Warner/Discovery, Paramount and even Apple has slowed, which is why they have expanded their scope to the global market with new local and regional content as well as their exported projects. In the past two years, subscribers have become increasingly frustrated when they lose content on one service, have to juggle multiple subscriptions and have the service’s recommendation engine serving up poor or meaningless viewing options. McLennan noted that studies have shown that churn has held steady at 37 percent for paid streaming services as people subtract/add services in search of content they want and 25 percent return in 6-12 months for the service’s new unique content.