The playing field for the media and entertainment industry has undergone a sharp change. OTT streaming services have taken center stage, beating out traditional television.
With that, subscription based streaming services have consolidated their position as one of the highest revenue contributors for media and entertainment broadcasters. Latest research from Digital TV estimates that the SVOD market will reach 1.76 billion by 2028.
As a broadcaster providing VOD services, it’s key to realize that subscription pricing models are fundamentally different from selling on a pay as you go model. That’s because this recurring revenue business model shifts the value from a transactional event to a lasting relationship.
In subscriptions, as long as the pricing strategy is right and there’s proper service and content, it’s possible to engage and retain existing customers for years. That’s what smart broadcasters focus on to optimize their customer lifetime value.
When approaching subscription pricing for streaming services, it’s key to take note of the current OTT market scenario and economic condition. Currently, the times are getting challenging for OTT broadcasters as the SVOD market matures.
Subscribers today are overwhelmed the multitude of streaming options. Moreover, there’s widespread subscription fatigue from having multiple subscriptions and the inability to keep track. Thus, despite the demand in entertainment, customer acquisition and retention is tough for broadcasters today.
Moreover, the current economic climate is dotted with uncertainty around a recession along with high inflation prevalence. This is making it difficult for people to afford multiple subscriptions, rendering the right pricing strategy as a critical variable in driving OTT success.
Getting the optimal price points in SVOD subscription necessitates understanding what will make customers pay happily, and designing the offering accordingly.
This includes brainstorming to design offers in different ways to include flat-rate pricing, and value based pricing options like a freemium strategy and so on to appeal to different customer segments.
We have compiled the most recent research on pricing tactics with our decade of experience as subscriber retention experts. Our insights are carefully curated to help you develop a strategic approach to building your SVOD pricing strategy, in a way that will maximize your subscriber acquisition and retention.
These insights are applicable for both beginners and established players in the OTT industry looking to offer services to multiple buyer personas and scale revenue.
Gear up to boost your subscription pricing scheming with practical, and easy-to-implement tips.