Why do subscribers unsubscribe
This article will examine the main reasons for the decline of the audience of streaming services, such as tariffs, content fatigue, and inconvenient navigation.
Streaming broadcasting has been adversely affected by the prolonged economic downturn around the world. Furthermore, prices are constantly rising for goods and services, as well as money depreciating against a backdrop of reduced purchasing power. Plus the 2023 arms race.
Against the backdrop of these processes, the price of content is also growing in order to retain subscribers and engage new ones.
Even though users naturally crave entertainment as a distraction in the face of inflation and a global recession, they also have to save money to cover themselves from uncertainty.
JD Power conducted a study to find out how satisfied people in the US are with the services provided by TV companies. In addition to reliability and generating a large amount of content, the price has become increasingly important for consumers. Nearly 60% of respondents now place the cost of services first.
The new economic reality also requires service providers to reduce digital entertainment costs.
Is there a way to strike a balance?
Until now, we have only seen customers move from one provider to another in the hope of getting the same content at a lower price. On the one hand, this results in the creation of many new user accounts, but on the other, these accounts are abandoned equally easily.
The operators and marketers must come up with other ways to retain the audience so that the ARPU (Average revenue per user) indicator does not decline.
To put it mildly, digital consumers are dissatisfied with the current situation, to say the least.
According to the latest JD Power US Streaming Pulse survey, users are no longer satisfied with the quality or cost of content. The estimates fell by -0.41 in the summer of 2022, while they fell by -0.38 in the summer of 2021.
It doesn't seem like much. Yet even while audiences are cooling off, more and more money is being poured into the film industry and new premieres.
HBO's House of Dragons and Amazon Prime Studios' Ring of Power, for example, have record-breaking costs per episode.
Users no longer want to settle for less once they have experienced good quality.
They prefer to cut costs, have less content, but still good quality.
This means that if you provide streaming services, you can no longer cut costs on making a movie.
So, people have learned to consume content avidly and they need to somehow ensure a continuous flow. They jump from application to application, waste time, get annoyed and become hostages of the “tyranny of choice” scenario. Ultimately, they drown in a sea of this ever-expanding list of services. And they can't find what they really love.
At the same time, combining the complexity of the path and the high price, services get short-term subscriptions. The user finally finds what they were seeking, watches content or plays a game, and then cancels their subscription.
On the one hand, 60% of people occupying a separate living space are subscribed to an average of four or more services (in the summer of 21, there were 3% less of them). The process, however, is not parallel, but sequential. Therefore, their spending on streaming services does not increase.
We have already written about why people hate ads and what they are willing to pay just not to see them in the article “Monetization and competition among streaming services”.
Interestingly, people have become more loyal to advertising along with hate and algorithms that allow it to be embedded more gently. Economic uncertainty pushes them to put up with a commercial at the beginning or at the most inopportune moment in the middle of the viewing.
For the sake of cutting costs, they are willing to tolerate advertising. So things are changing pretty quickly.
While content-hunting customers are subscribing, unsubscribing, and re-subscribing, service providers are trying to adjust by disrupting established business models of what subscriptions or ads should look like.
Users are spontaneous and fickle, and content providers are clumsy structures unable to change everything at once.
AVOD, or Advertising Video on Demand, is a model that lets viewers pay for movies by watching advertisements. To keep it, the service provider builds a complex strategy.
Thus, in order to take a share of the market from linear channels, they have learned to show ads not as intrusively as they used to be. Sometimes they even refuse to insert ads in the middle, offering the client to watch several videos at once at the beginning.
It also plays an important role in customer retention.
To retain their viewers, AVOD and SVOD companies will have to invest in intuitive interfaces. Smart technologies can make this process more efficient. The content library can be arranged in a way that makes navigation easier for users.
You can read about how AI is affecting the streaming market in “How artificial intelligence helps marketers create video content”.
Considering all these factors, it becomes obvious that for high-quality competition, many processes will have to be automated and it is possible to change the broadcasting site.
We offer you a cost-effective broadcasting solution that can be set up with just a few clicks.
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