After losing 200k subscribers in Q1, Netflix has pulled out a swift u-turn, adding more than 2.4M subscribers in Q3.
While it’s true that successful shows including Stranger Things and the Jeffrey Dahmer story draw consumers in (no amount of marketing remedies poor content!), capturing and retaining users takes more than just compelling story lines in this increasingly competitive industry.
Netflix is adapting its tactics; it’s introducing a new advertising option to offer consumers a cheaper subscription model despite years of highlighting an ad free experience as a key selling point for consumers; it has plans later this month to launch a new movie, “Glass Onion: A Knives Out Mystery”, in 600 US cinemas prior to releasing it on its own platform; and it is cracking down on password sharing to maximise subscriber numbers.
However, potentially one of the biggest changes in customer acquisition tactics is the rapidly rising number of subscription bundles. Streamers are benefiting from better customer engagement strategies, which put these services in front of more prospective viewers and provide incentives to consumers, such as free trials or discounted pricing, to not only sign-up but, crucially, to stay subscribed to these services.
More and more consumers are finding their way into subscription services through third-party vendors such as mobile network operators or home broadband providers, rather than through direct sign-up flows. In an environment where consumer spending is under pressure and there is a surfeit of streaming services to jump between, these incentives presented to consumers by a blue-chip business they trust, are enough to generate more sign-ups.
To invest in new content requires a sure line of growing revenue. The cornerstone for revenue growth is subscriber numbers. As Netflix and others consider how to maintain the pace of growth, partner-led incentives are becoming increasingly important to reaching, engaging with and maintaining paying subscribers in both developing and mature markets.
Reach outside of home markets is becoming especially important. For example, the majority of the 2.4M subscribers Netflix added in Q3 were outside the US. By partnering with Bango, merchants can access millions of potential subscribers via telcos and other payment providers connected to the Platform. With payment connections in more than 70 countries, Bango is well placed to help merchants find routes into geographies across the globe. There is a long way to go in the battle for subscription market share.