How to Measure Viewer Retention for SVOD Businesses

Dimitar Serafimov| Wed Sep 20 2017 CET| Product guidance

The world of SVOD is both cutthroat and competitive, and in today’s world, it’s no longer good enough to simply drive people to your service, now you have to encourage viewer retention.

The art of gaining viewership and keeping it is as intricate as it is demanding – as HBO recently found out after watching its SVOD subscribers plummet following the screening of the season finale of Game of Thrones. And that’s just the tip of the proverbial iceberg.

That said, when it comes to keeping your viewers on board, engaged, entertained and inspired, measuring viewer churn and retention is essential. Here are some ways you can do so, led by the classic SaaS metrics. 

Calculate customer retention rate

Measuring the rate of customer retention is relatively simple, but incredibly effective. To do this, you’ll need the following pieces of information…

  • Number of customers at the end of a period (E);
  • Number of new customers acquired during that period (N);
  • Number of customers at the start of that period (S).

Once you have these metrics, you’ll be able to subtract N from E. To calculate the customer retention percentage; you can divide that number by the total number of customers at the start and multiply by 100.

This measurement will offer a clear base insight into how your SVOD service is performing in terms of retaining subscribers or viewers over key time frames.

Dollar retention rate

In contrast to CRR, which measures the customers that renew, DRR measures the dollars or money that renews. This retention metric is usually measured on an annual or cohort basis.

Dollar retention (DRR) can be measured in much the same way as viewer retention, but DRR focuses only on the revenue you retain, rather than the viewers. So if your existing customers start paying more for their subscriptions, through upgrades or additional purchases, your DRR might grow even if you’ve lost a few viewers along the way.

Customer Retention Per Cohort

This measurement allows you to separate users based on start date and perform a detailed cohort analysis. Essentially, what you’re looking for is a flattening of the retention curve, or, that point in time in a cohort – whether it’s day two or week three (or whichever time frame you choose) – where users cease churning.

Cohort analysis adds another dimension the performance of your SVOD service and will allow you to understand where and even when you need to make changes to add value and encourage retention. This analysis is something you should do immediately if you haven’t already started. We are really proud with our cohort reporting in the new Broadcaster Dashboard! 

Cleeng Dashboard – Cohort Analysis in SVOD
Source: Cleeng Dashboard – Cohort Analysis

Customer Lifetime Value

Customer lifetime value or CLV is a prediction of all the value your SVOD empire will derive from their entire relationship with a customer, from start to finish. This is an incredibly useful metric as it will help you paint a clearer picture of the value your service drives. In order to get to the most accurate number, we tend to use the following equation, where we take into account the Average Revenue Per Account (ARPA) and the churn rate:

Lifetime customer value equation

CLV calculations are somewhat predictive but very worthwhile nonetheless. Learn more about CLV here.

Customer retention is critical to the long term success of your SVOD business and by measuring these metrics, you’ll gain the power to make your service more powerful and sustainable than ever before.

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