How to Create an Effective SVoD Pricing Scheme

Dimitar Serafimov| Mon Jun 17 2019 CET| OTT Industry

SVOD price hikes

Behind any successful subscription service stands a well-designed pricing scheme. In fact, pricing schemes are one of the most critical elements of any SVoD business strategy, regardless of your niche or sector.


The importance of SVoD pricing strategies

Pricing has a direct impact on your business’s success-centric KPIs. Even the smallest of price alterations can serve to improve your profits, significantly.

A recent HBR study discovered that a mere 1% improvement in price can boost operating profit by as much as 11% – a real driver of business growth and performance.

A testament to the power of an effective, well-developed pricing scheme.

5 tips on how to set up your SVoD pricing right 

It’s clear that a solid pricing strategy is integral to the growth of your SVoD business. To help you on your path to success, here are five practical price scheme-boosting tips:

  1. Consider value and customer satisfaction
    Building a pricing model based on value and customer satisfaction will help make your SVoD empire as sustainable as possible. Based on this notion, the following pricing models are most popular worldwide: the Gabor-Granger technique, the Van Westendorp Price Sensitivity Monitor, the brand Price Trade-off, the Conjoint Analysis, and Discrete Choice Analysis. Read more about these models here. 
  2. Offer ample choices
    Offering your consumers enough choices will help you to retain existing subscribers while attracting a new audience. Approaches including tiered pricing, freemium, or consumption-based pricing will help your viewers commit to a plan that suits their personal needs or preferences, building trust while offering a solid level of flexibility.
  3. Be bold
    Don’t be afraid to adjust your pricing. Experts recommend making changes around every six to nine months, even more frequently if you’re a growing venture. But, be wary of A/B testing when making pricing changes, as offering the same product for different prices to different consumers could damage your brand reputation.
  4. Leverage incentives
    Incentives make the digital world go round – so use them to your advantage. Coupons, free trials, and passes are potent marketing tools concerning pricing, and these approaches serve to offer subscribers greater value when necessary.
  5. Communicate in a timely manner
    In the SVoD world, timing is everything. That said, you should time your pricing alterations with the launch of incredible new original content or innovative service upgrades. In doing so, you’ll be able to offer a deeper level of value while justifying your changes in a positive way that will help maintain customer satisfaction level and as a result, your NPS score.

SVoD app pricing

As apps, by their nature, are more exposed in the marketplace, they need more considerable attention and research. When settling on app price, there are some interesting studies to explore – this chart from Liftoff included:

At a glance, the chart shows us what we’d consider as obvious: apps in the middle price range show the highest conversion rate.

But digging deeper, it’s explicit that the Goldilocks principle governing product success also rings true for mobile app pricing.

The ‘just right’ price is the sought after middle ground between the two extremes – a range that doesn’t force users to exist outside of their typical comfort zones.

Can you use pricing to tackle churn?

Pricing can affect customer churn significantly – but, adding an annual pricing scheme to your offerings could well tackle this issue.

In fact,  studies suggest that around one out of five SaaS businesses offer both monthly and annual pricing plans. Monthly payments might be the staple of your business, but, annual subscriptions could secure you more upfront custom, boosting your cash flow, and reduce churn in the process.


Pricing counts. And now that you have all of the tips and tools you need to refine your strategy, it’s time to get started – best of luck.

Learn more about you can grow by tackling OTT churn: