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If content is king, distribution is King Kong

During the Paley International Council Summit, a recent conference in New York, one of the topics up for discussion was titled ‘If content is king, distribution is King Kong’. It was a conversation between Verizon & NBC and the attention was on why content companies needed to focus on distribution as well as content if they want to win in the new subscription economy.

It’s no secret that growing subscriber numbers, especially for SVOD services, is becoming an increasingly uphill battle. Competition is the big factor, not just from other SVOD services (of which there are now many!) but from anything that occupies consumer attention. This could be gaming, YouTube videos, reading the news, going out to the cinema etc. Another key factor is cost. Consumer budgets are under pressure and with such disaggregation in the SVOD market, consumers need an added incentive to select one over another.

I think we can consider ‘engaging content’ pretty much a given for most SVOD services. So, what’s next? We’ve seen a clear move from the majority of SVOD services to shake up their pricing models by including an ad-supported tier. This certainly helps to address budget concerns (even if the ads are a little annoying!). We’ve also seen a password crackdown, preventing users from sharing accounts, which improved subscriber numbers a little as consumers were forced to take out their own accounts instead of piggybacking onto another account.

Now what? How can content providers continue to find and engage with new subscribers?

Distribution – King Kong – is the other key factor at play. How do you get your service in front of new users in a format that makes them want to subscribe, makes it easy for them to subscribe, and helps to keep them subscribed. Telcos are the obvious partner, not least because they have an established billing relationship with billions of customers globally and a ready marketing channel to those customers. Importantly, it’s also the channel the majority of consumers chose when asked who they would like to manage and aggregate their subscription services.

Companies like Verizon are at the forefront of this trend. Using Bango technology, Verizon is offering 30+ subscription services bundled with its own first-party service. Merchants from Netflix to Disney through to Peleton, Duolingo, Perlego and Calm are benefitting from Verizon actively promoting their services through its +Play portal. As consumers increasingly look to these portals to find and manage their subscription services, being in them is growing in importance. It not only gives merchants a seat at the table – or a place in the shop window, if you like, – companies like Verizon are actively creating compelling offers that make subscribing to these services all the more appealing (as well as investing their marketing dollars to promote them). The latest example is a new planned offer from Verizon that gives its customers a discounted bundle of streaming services that includes the ad-supported tiers of both Netflix and Warner Bros. Discovery’s Max. The bundle is set to cost $10/month instead of the roughly $17/month for the services separately.(1)

What’s more, subscriptions taken out through a bundle tend to see lower churn rates. At the summit, Verizon talked to exactly this point stating: “Churn happens when things get complex for the user, such as an expiring credit card that nixes a subscription. Churn management and retention is an art. That’s what we are good at.” Adding the merchant point of view, NBC echoed this sentiment adding “Better partnering between networks and distributors and tech platforms will lower churn rates.”(2)

For a growing number of telcos, the choice of technology to power this functionality and create this attractiveness and stickiness around subscriptions is the Bango Digital Vending Machine (DVM). Using the DVM to power their subscription hubs, Bango telco and merchant partners can make use of the data insights generated by the Bango Platform to maximize customer acquisition rates and minimize churn, applying science to the art of retention.




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