Racing Against ChurnSeptember 17, 2022 5:15 pm
Heat is turning up in the streaming wars, as subscribers jumping ship becomes commonplace.
WHAT IS OTT CHURN AND WHY DOES IT MATTER?
Put simply, OTT churn refers to the loss of subscribers from an OTT or streaming video platform. They fall into one of two categories:
Voluntary churn — when customers actively decide to cancel their subscription. Involuntary churn — when customers unintentionally lose access to your service. Most often, involuntary churn is attributable to non-renewals or accidental payment failures.
For streaming services, a high OTT churn rate means reduced customer lifetime value (CLV), and increased customer acquisition costs (CAC). Essentially, your platform must double up on acquiring new customers while retaining existing ones over time.
Today, Netflix estimates that by delivering personalized recommendations and better search results, it is able to minimize voluntary churn that would reduce its revenue by $1 billion annually.
REAL-TIME RECOMMENDATIONS KEEP SUBSCRIBERS ENGROSSED, FOR LONGER
Recommendation systems like BytePlus Recommend reduce the time it takes for users to discover great content to watch. Drawing on years of experience in machine learning (ML), the algorithm suggests tailored content that is interesting enough to each user before they decide to close the tab. These hyper-personalized recommendations are served in real-time, based on each user’s unique online behavior.
The end result is serving your subscribers with very precise genres that they are in the mood for — like Dystopian Sci-Fi Thrillers, where the protagonist is a prisoner housed in a mysterious vertical cell, for instance. The more subscribers are exposed to content that is relevant to them, the longer the engagement times, and the higher the platform stickiness.
STAYING AFLOAT DURING THE INEVITABLE CHURN
” I believe that it is up to the service providers to go above and beyond to help their customers explore the depth of content through individualized ML-based recommendation. In essence, recommendation as a feature is no longer sustainable — it should be the heart of their revenue strategy. ”
– Charlie Sung, Head of APAC, BytePlus
|There is no getting away from the churn conundrum, especially with a growing number of competitors in the streaming space. But recommendation systems like BytePlus Recommend can help to slow the exodus of subscribers from your streaming service.|
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This post was written by BytePlus