Pricing Has a Significant Impact on Subscriber Retention

Dimitar Serafimov| Tue Oct 22 2019 CET| Analytics

In an ever-growing SVoD landscape, subscriber loyalty and retention are essential to long term sustainability and growth.


What’s interesting is pricing has a more significant impact on subscriber than first thought. 

A recent survey from PCMag reveals that 65% of streaming users confirmed they would cancel their streaming subscription over price hikes. Moreover, 14% said they would cancel a subscription over losing their favourite movies or content, while 9% favour exclusive original content.

Pricing and SVOD cancelations

It’s true that content is indeed king when it comes to SVoD services, with many of the big players fighting for the rights to particular shows, movies, and boxsets. But, price is also a driving factor.

PCMags’ discoveries are difficult to ignore—it’s clear that consumers place price incredibly high on the priority list. As such, it’s an element of your business model that deserves due care and consideration.

Based on this realisation, a host of notable SVoD platforms have started to reconfigure their pricing strategies (Disney, for instance, prices its upcoming SVoD package at $6.99 per month, and $12.99 total for a bundle that includes Disney+, Hulu and ESPN+) to suit the needs of their respective audience. 

These more complex but competitive pricing models appear sustainable, placing the pressure on the likes of Netflix as it continues to inflate its subscription costs to cover its ever-expanding content expenditure.

While pricing is a significant driver in terms of subscriber retention, it appears that with the right balance of content and pricing, there is still everything to gain, and more. According to his chart from Parks Associates, the number of households :

Parks Associates: Number of US OTT Service Subscriptions

 

Here, it’s clear that SVoD subscriptions has risen steadily in recent years and is set for further growth this year, and beyond.

Pricing has a more weighty impact on subscriber retention that first thought, but by revising your cost strategies while delivering content and understanding on the subscribers’ affection towards your service, success will be yours for the taking.


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