Content Everywhere: how to improve subscriber engagement and reduce churn

At the same time, the market’s innovative technology providers are helping streaming providers and media organisations to introduce highly flexible subscription models, intuitive fan engagement options for sports services, and AI-driven churn deflection and behaviour analytics tools that are making a big difference in long-term retention and profitability.

In this feature, Content Everywhere vendors and suppliers discuss three key aspects: which new tactics and technologies streaming companies are deploying to maximise subscriber retention and tackle churn; how AI is impacting subscriber acquisition, onboarding and retention; and what streaming businesses are doing to adapt their monetisation models to deepen subscriber loyalty and drive revenue growth.

Maximising subscriber retention and tackling churn

Gilles Domartini, CEO of Cleeng, says streaming businesses are navigating a complex landscape characterised by market saturation, escalating user acquisition costs, and subscription fatigue, “with churn rates up at least 4% since 2019. To deepen subscriber loyalty and foster new revenue streams, these platforms are turning to monetisation strategy innovation.”

“Hybrid monetisation has become an obvious solution to re-engage and broaden the pool of customers. However, this transition to hybrid brings its own set of challenges. On the reporting side, businesses must overcome complex revenue management (tracking and optimising two distinct revenue streams) as well as achieving a unified user view across both paid and ad-supported plans in order to optimise LTV across the two models. On the ad management side, it requires mastering ad personalisation and targeting, as well as knowing where to place ads without impacting subscriber satisfaction,” Domartini says.

Martin Prins, head of product at Media Distillery, says companies are certainly focusing hard on user experience as a churn-reduction strategy.

“They can’t afford to be the reason subscribers go elsewhere, which is what happens when viewers can’t easily find the video content in a service provider’s library. A focus on metadata quality and depth, plus innovation in search and discovery, is key to preventing users from switching to rivals like YouTube,” he says.

Rick Young, SVP, head of global products at LTN, also notes that content creators are relying on long-standing tactics that are “proven winners” with traditional channels and platforms when looking to the future on new platforms.

“Live sports is a differentiator. Live news gives viewers a reason to come back. With greater competition, more demanding audiences and the added complexity of managing live and real time content, global streaming companies need to ensure that their technical infrastructure is watertight. Media organisations turn to IP-powered media workflows to drive monetisation of live content through scalable, flawless metadata signalling and automation to drive advertising and channel customisation workflows,” Young says.

Thomas Buffolano, who is head of business development, college sports at The Switch, says media companies realise that offering more options, whether in the form of free FAST, lower level paid, or premium tier subscriptions, is emerging as a key to retention.

“We can expect the streaming industry’s efforts to stem churn to be a driving force in developing newer technologies and business models – indeed, FAST may only be the tip of the iceberg. The ability to formulate a content strategy that meets the audience where and how they consume content is critical in developing multi layered acquisition and retention execution,” he adds.

Pierre Donath, chief product officer and chief marketing officer, at 3 Screen Solutions (3SS), says there are many new initiatives in the area of budget control, and cites efforts by super aggregators, whether pay TV providers or telcos, to create bundled and super-bundled packages, giving a “significant price advantage over individual subscriptions”.

He also says that an important and effective new tactic for these super-aggregators is to provide subscribers with more subscription flexibility.

“Operators are beginning to allow customers to swap and rotate their premium services. So, for example, one month you’ll have access to Netflix as part of your bundle, to be replaced by Disney+ the following month. All the while, the monthly subscription charge for the bundle remains the same. The subscriber can therefore effectively follow their desired content without paying for lots of services and content that they’ll never watch. We’ve seen that this type of super-bundling is helping consumers save as much as 30% on their monthly entertainment bills,” he says.

Meanwhile, Gatis Gailis, CEO of Veset, comments that as streaming companies broaden their monetisation models to include ad-supported content, there’s industry-wide recognition that ad experience needs to improve.

“This is driving a lot of development on the ad tech front, and video providers are experimenting with innovative ad formats that are less obtrusive than traditional ads such as in-video ad insertion. Improving ad experience is crucial, not only to boost engagement in order to increase ad revenue, but also to create a more enjoyable viewing experience so that subscribers stick around,” Gailis says.

Mike Napodano, chief delivery and information officer at Operative, further notes that data is an important factor in maximising subscriber retention.

“Streaming companies can model subscriber behaviour, segment subscribers and better understand which customers are more likely to be loyal or churn. Streaming companies are able to use content delivery and order management technology to personalise content prompts and marketing messaging, which creates a better experience and creates stickiness,” he says.

Bleuenn Le Goffic, VP strategy and business development at Accedo, agrees that OTT video providers have had to refocus their strategies on tactics that truly bring customer value, delivering the most relevant subscriber experience and responding to heightened audience expectations.

“And, as there is not something like a one size fits all experience, they are wise to invest in a data-driven product delivery strategy. Easily put, this consists of designing a user journey that is meant to deliver a certain impact for a specific subset of your audience; then release it quickly and update it based on users’ reaction. While this seems relatively straightforward, it can quickly get fairly complicated if your platform is not flexible enough to address different audiences with different experiences, or if your development team is not working hand in hand with the observability and data department to ensure evolution of the telemetry data gathered,” she says.

Le Goffic adds: “In the context of churn, the experience also needs to be thought of as extending beyond the video service itself, to include how audiences interact with your brand across other digital platforms, including social media. Without having solid processes in place, there is no technology that will solve this challenge for video service providers.”

Steph Lone, global leader of solutions architecture for media and entertainment at Amazon Web Services (AWS), says subscriber retention starts with knowing your audience, and ensuring they are being served the content they care about. “An effective first-party data strategy, a modern customer data platform, and AI/ML driven audience segmentation and customer behaviour tools are critical needs for streaming companies to ensure they are effectively addressing their audience, and predicting churn before it happens,” she notes.

In summary, says Paolo Cuttorelli, SVP, global sales, at Evergent, in a competitive streaming landscape, media businesses are getting much more creative and experimenting with advanced tools to secure long-term retention and profitability.

“A new approach is needed to address the problem of churn, both voluntary (e.g. choosing to cancel a service) and involuntary (e.g. when a subscriber’s card payment is declined). Different tools are needed for different churn types. For example, effectively pre-empting voluntary churn and tackling it in real time requires specialist technology and creative strategies more closely connecting providers with their consumers. Meanwhile, a declined card payment can be addressed with AI-powered capabilities to identify and execute the optimal retry strategy,” Cuttorelli says.

Matthew Wilkinson, CEO of Magine Pro, agrees that in the face of market saturation and rising living costs, “streaming service providers should adopt innovative tactics and technologies to strengthen subscriber retention and minimise churn. We recommend a multifaceted approach anchored in data-driven strategies to nurture enduring customer loyalty.”

The impact of AI on subscriber acquisition, onboarding and retention

On the topic of AI, Cuttorelli says streaming services are harnessing AI-powered tools and flexible monetisation strategies such as intelligent payment recovery features, or tiered pricing offers to proactively combat churn before it even occurs, maximising retention.

“Data is at the core of these tools. A data-driven approach based on insights from millions of real users allows predictive AI and machine learning models to gain a deeper understanding of the potential reasons for cancellation and automatically deploy a personalised prevention tactic. Without the utilisation of high quality data, AI is meaningless,” he says.

Jakub Kruczkowski, strategic business manager at Better Software Group (BSG), also points to the use of AI as one key strategy to improve subscriber acquisition, deployment and retention.

“AI-based analytics enable personalised content recommendations, increasing user engagement by ensuring that viewers find content that matches their interests and viewing habits. Moreover, artificial intelligence plays a key role in identifying at-risk subscribers by analysing viewing patterns and engagement levels, enabling companies to proactively respond to potential churn with targeted offers or content,” he says.

Prins from Media Distillery comments that AI is being used by video service providers to improve every part of the viewing experience.

“We’ve seen a huge growth in interest over the past six years in automated cleaning and augmentation of content metadata for an improved UX,” he says, noting that AI tools have “a really significant impact on subscriber retention, with some of our customers reporting up to a 60% drop in relevant complaints in their NPS surveys, plus noticeable increases in the amount of content watched on average.”

LTN’s Young observes that nurturing AI integration is helping global streaming companies reshape customer engagement, satisfaction, and loyalty.

“AI provides organisations with user data, analytics, and personalisation that can be utilised to keep customers happy and drive business success. With advanced AI algorithms, streaming companies can now easily identify signs of customer churn and prevent losses, encouraging them to identify targeted retention strategies. For example, AI can help create hyper-personalised experiences that meet consumers’ needs and preferences, fostering better engagement and retention,” Young says.

Buffolano from The Switch also uses the example of how AI tools can be used to gather and analyse audience data.

“Business models that are supported by AI insights can be tailored far more effectively to appeal to the demographics that make the most commercial sense with discovery initiatives. In addition, when customers either churn or are lapsed, AI-driven analysis can trigger offers that are more likely to make them stay or return – such as moving to a lower-tier subscription,” he says.

Donath comments that AI still has the biggest impact in the user interface when it comes to recommending the best next content to watch and says his company 3SS is now exploring how “we might be able to use AI to generate actionable insights to analyse and understand where there is opportunity to optimise the experience in each step in the customer or entertainment journey.”

Meanwhile, with generative AI, he says, there’s the possibility to generate short clips, videos, and metadata to promote content in different ways, increase engagement, and simplify the overall entertainment journey. “It’s important to note that there are, however, legal and licensing issues to consider in evaluating GenAI’s net benefit,” he warns.

Veset’s Gailis notes that AI-powered tools are already being widely used by OTT services for data analytics. “Application of AI for this purpose is allowing service providers to gain valuable insights into the behaviour of consumers and uncover trends. As well as helping streaming services to improve acquisition, onboarding and retention, this knowledge is also enabling more effective ad targeting, which helps to boost engagement,” he says.

Napodano believes, meanwhile, that AI has “dramatically improved the accuracy and predictive capabilities of the subscriber lifecycle. Streaming companies can model subscriber behaviour data to better understand what attributes indicate a valuable or loyal subscriber. They can use AI to recommend content and shape audience experiences.”

Peter Docherty, CTO and co-founder of ThinkAnalytics, comments that the first 100 days are key to turning a new user into a loyal viewer and says AI and ML can “enable personalised experiences as well as identify signs of churn the second they start onboarding a new user”.

AI and ML “can be used to understand every nuance of the user journey, including analysing their search key words, to detect their preferences and mood to offer compelling content. This is key to giving unregistered users of AVOD and FAST services a reason to return before they leave,” he says.

Le Goffic says AI can help in two fundamental ways, by “automating and delighting. The first point is already established, especially in customer care where bots have been used for quite some time in order to increase value for users when they are in the need of immediate assistance. We have also seen AI automate sophisticated metadata enhancement, something which is still a key challenge for many global video service providers.”

The second point is a bit more difficult to grasp, she says, but “when you consider how fast generative AI tools have engaged and convinced global audiences, who are becoming increasingly comfortable conversing with these engines, it is easy to imagine how these tools are capable of really bringing a new level of delight and surprise to video service audiences. The hyper personalisation conversation is obviously central here, where AI can empower highly targeted experiences on levels we have yet not seen.”

Lone from AWS observes that AI/ML, and particularly generative AI, is having profound impact on the streaming business.

“Generative AI can analyse exabytes of data, identifying patterns and trends to derive rich analytics for customer segmentation, targeted product and service offers, and churn prediction. Streaming companies also use these insights to drive personalised content recommendations, which are critical to onboarding and retaining customers,” she says.

Tom Dvorak, co-founder and chief commercial officer at XroadMedia, adds: “With the ever-growing challenges for both consumers and service providers, it’s not surprising we’ve seen more customers prioritise personalisation as a strategy to combat churn. Having a deep understanding of all users’ behaviours and preferences allows them to meaningfully enhance the user experience, which increases loyalty that contributes to preventing churn. This can be done with solutions harnessing AI and ML technology.”

How streaming businesses are adapting their monetisation models

According to Prins, video services realise that the “one size fits all” era is over. “To deepen subscriber loyalty, they need to offer subscribers choice. For example, some viewers will sit through ads to get content for free. Others will pay a premium to skip ads. Catering to both in a catch-up service requires knowing exactly where ad breaks are,” he says.

Young also notes that streaming players across the chain can no longer rely on simple subscription plans as their primary revenue driver.

“As deep-pocketed rivals enter the streaming game and audiences tighten their budgets, it has meant that organisations have had to get creative to tap into monetisation strategies beyond their original focus.

The most notable shift has been introducing ad-supported only or hybrid ad and subscription models, offering more flexible ways to access content. These have been an effective strategy to retain audiences and attract new ones,” he says.

Donath further observes that if a provider wants to grow, it needs to reach new audiences. “The classic pay-TV customer is getting older. Typically this is a stable and long term customer segment and it’s in the operator’s interest to keep this group happy. But at the same time, you need to understand and acquire new and younger audiences — the people who have grown up with YouTube, or Twitch, where everything is free.”

The real challenge, he adds, lies in marketing, and “how to adapt marketing and distribution to reach these younger audiences, while keeping control of user acquisition costs. It’s especially important for the provider to ensure they’re on the devices that their intended audiences use. For this customer segment, it’s not all about the set-top box. Rather, developing great experiences for viewing on popular OTT devices is key.”

Gailis sees that streaming companies are broadening and expanding their offering by including more ways to watch them. “By offering content on-demand with and without ads, and also in linear format as a FAST channel, OTT companies are appealing to a wider audience. This has a dual effect because offering a wide variety of ways to watch can help to retain subscribers as well as attract new subscribers. BVOD (broadcaster video-on-demand) services are an example of this – viewers get the chance to watch live linear channels, view ad-supported content on-demand, or for a premium, watch ad-free content on demand. This is proving to be a highly effective strategy,” he says.

Napodano says that with unified cloud technology, streaming companies can maximise the revenue potential of their inventory, optimize subscriber stickiness and make strategic decisions about their content. “Cloud brings a level of flexibility and scale that streaming companies need to grow and profit at the speed they need to keep up with audience and advertiser demand,” he says.

Lone thinks that streaming companies “are leaning into new ad experiences such as shoppable video and non-intrusive ad formats. Shoppable experiences increase customer engagement, and create net-new revenue streams for the streaming company. Non-intrusive ads placed on overlays, squeezebacks, or other in-content real estate create new ad units and maintain continuity of viewing for the consumer. Virtual product placement is another advancement in non-disruptive ad experiences, also creating a net-new revenue opportunity.”

Overall, Cuttorelli concludes that subscription models are evolving. “Content providers are experimenting with multiple viewing models and price points across OTT, AVOD, and FAST services. With tightened budgets and more choice than ever, subscribers are in the driving seat, and flexibility is paramount. To appeal to today’s consumers, media companies are testing innovative subscription management models to retain subscribers and increase revenue.”