Antenna’s annual report on SVOD, “State of the Subscriptions,” highlights the shift in the streaming video industry towards managing subscriber bases. While the number of SVOD subscriptions has more than doubled in the past four years, the annual growth rate has slowed to +10.1% in 2023, with Netflix leading the market share at 26%. Churn rates have also tripled over the same period, indicating a higher rate of cancellations and sign-ups among SVOD services.
The study found that while overall growth in new SVOD subscriptions remains positive, the number of cancellations has increased significantly. This has resulted in a decline in net new subscribers from 41.2 million in 2022 to 24.2 million in 2023. Churn rates are higher among new subscribers than long-term ones, emphasizing the importance of retaining customers over time. Additionally, the report found that a significant portion of cancelled subscribers eventually return to the service, with 41% re-subscribing within a year.
In response to these trends, SVOD providers are advised to shift their focus from subscriber growth to customer lifetime value (CLV). This involves segmenting customers based on factors such as tenure, depth of engagement, diversity of content consumed, and frequency of usage across different devices. By identifying loyal and casual users, providers can tailor their strategies to enhance the value of their subscriptions and improve customer retention.
To improve subscriber retention and loyalty, SVOD providers are recommended to implement various marketing strategies such as launching new products, hosting live events, offering merchandise and loyalty plans, and promoting annual subscriptions. These initiatives aim to enhance the overall user experience and incentivize subscribers to remain engaged with the service. The expansion of tiered subscription models, as forecasted by Deloitte, offers another avenue for providers to tailor value propositions to individual subscriber preferences and reduce churn rates.
As competition in the streaming video market intensifies, media companies are under increasing pressure to make their SVOD units profitable. With linear television units facing revenue losses from cord-cutting and a challenging ad economy, understanding and retaining SVOD customers has become a key priority for industry players. By focusing on customer lifetime value and implementing targeted retention strategies, SVOD providers can navigate the evolving landscape and achieve sustainable growth in the increasingly competitive streaming market.
In summary, the “State of the Subscriptions” report from Antenna highlights the changing dynamics of the SVOD industry, with a shift towards managing subscriber bases and enhancing customer lifetime value. By addressing trends such as increasing churn rates, segmenting customer bases, and implementing targeted retention strategies, SVOD providers can improve subscriber loyalty, drive revenue growth, and navigate the evolving streaming landscape effectively. As the market continues to evolve and competition intensifies, understanding and retaining SVOD customers will be critical to the long-term success of media companies in the streaming video space.
