Are Streaming Services Listening to Their Subscribers? No, I Mean Really Listening?

Today, I woke up to this tease on top of my email list, sent from the VAB… “Want more insight into how consumers watch streaming content and how advertisers can best engage them? Backed by fresh, custom research, Recipe for Success shows you the 6 ways to harness the explosive growth of streaming to hit your campaign KPIs and deliver results.”

Many think adding these newer platforms as the solution to their problems of underdelivery. Then there are the various discussions about being able to accurately measure, de-dupe and understand any duplication of these audiences to arrive at the real unique and effective reach of a crossplatform ad buy. Existing and new measurement companies jump in, like Nielsen, Comscore, VideoAmp and others, developing and selling products to help the advertisers better plan and spend their precious dollars and to gauge if the advertising leads to “desired outcomes.” And of course, the “event,” “retreat” and webinar space is replete with talking head executives discussing all the various strategies to make the cross platform advertising they sell more valuable.

All of this “research to show” and the resulting activity is very important, generating more dollars for the companies, particularly in the current growth years where SVOD has, in a recent review by Brad Adgate in Forbes, been growing rapidly. He writes, “over the past four years the number of subscribers has more than doubled.”

Yet with all this activity, interest, discussions and growth, I must admit that I am perplexed by the fact that very few people are discussing the state of consumers attitudes and usage of these new streaming services. As I have spent my whole career “listening intently” to the consumer and doing this important and usually proprietary “research to know”, I’m amazed that no one is really talking about how inadequate the streaming services are at meeting the needs and wants of their customers.

If they did do that research, they would hear that things are not so rosy. Adgate’s excellent article -- Reducing SVOD Churn Should Be The Next Priority With Media Companies – reports on Antenna data that indicates that churn, those who disconnect from a subscription service, is way too high and getting worse over time. Yes, as is true in other subscription businesses like Time Magazine or at the subscription business AOL had in the late 90’s and early 2000’s, where I served as head of consumer research, longer term subscribers have much less churn than newer ones. Among our ten-year or more Time Magazine subscribers there was an astonishingly high renewal rate. Yet, among newer streaming services subscribers, we have problems. Antenna found churn rates that were double among new subs versus older subs. The new people who are becoming subscribers are not at all like the ones who came to these platforms many years ago. Not that all cancel and never return – some do come back – but there is clearly very little being studied about what consumers are thinking, what they are enjoying and what registers as key friction points that the business could be working on.

Maybe I am naïve. Perhaps the Paramounts, Netflixes and the Hulus of the world know very well exactly what these pain points are, but in the consumer research we’ve done in this area, we see huge issues that do not seem to be addressed. (For some fun, as you read this list, see if any of these issues apply to you or your household.)

A few examples:

Consumers are at a loss when it comes to discovering the content they want to watch. They report it “takes too long” to find something to watch, and they report that the screens to find something are a) very different across services, so they have to get familiar with many different approaches, and b) not very “user friendly,” so in short, hard to navigate.

Consumers are annoyed by how long it takes to navigate from one service to another one or to stop watching one show and move to another show even on the same platform. They were, of course, brought up on cable TV where one “clicks” and immediately it “responds.”

Consumers complain about the sound. Much has been written about differing audio levels from platform to platform. A major New York Times article noted that “making dialogue crisp and clear has become the entertainment world’s toughest technology challenge,” and that lots of consumers now use subtitles in English even though they are not hard of hearing.

Consumers say the number of services they want makes it too expensive for them. As we have all heard on virtually every news program, regular living costs are a real concern for many consumers. Many have found it necessary to add additional streaming services to get the shows they desire, and this adds onto the monthly expenses which are clearly under the microscope already. Consumers tell us this is one reason why there is so much password sharing, (even though some companies are beginning to execute policies to prevent it). Just a few years ago I did four focus groups of young adults in Atlanta with 12 participants each. In total, 47 of 48 of them admitted to the group that they were using the password of a friend or family member for at least one streaming service. In a few cases, participants had elaborate plans where each of their friends would buy a service and then share with the other 5 friends.

Consumers are confused with all the deals, partnerships and free previews and the myriad of details they need to know or remember. They report that they didn’t understand how much they’d have to pay when a certain preview period or deal ended. They feel like the streaming services are not being straight with them. And of course, no one like a price hike, or the addition of ads or increase in frequency of ads, and consumers mention these factors as well.

Consumers also say things that indicate that there is very little brand uniqueness across the streaming services. Consumers get confused about where various shows are available because the streaming services do not really stand for anything or mean much in their eyes. What HBO meant to consumers at one time (“It’s not TV, it’s HBO!”) has changed, and the streaming service is now just called “Max.” Brand experts would argue that a very important part of a brand’s identity is that its followers “know what to expect” from the brand. That it is predictable. Sadly there is not much of this type of brand equity across the streaming platforms.

Consumers click “unsubscribe” without much research nor thought. They come in and out of services frequently In the past, subscription companies used to make it rather difficult to “unsubscribe.” And they incentive subscribers to stay.

At AOL, consumers had to call a special 800 phone number to unsubscribe, and when their call was answered, a telephone representative tried desperately to “save” them so they would not leave. AOL commonly gave away an “extra month free” if the customer stayed. Today, on the streaming company’s digital platforms, all it takes is a simple click and the customer is unsubscribed. And believe me, the younger consumers (particularly those under 40) are digital experts at clicking the unsubscribe button. There is very little “consumer inertia” like there was just 10 or 20 years ago when customers rarely made changes to their cable TV package.

Finally, the streaming services had at one time a huge amount of product. These days, not so much. They learned that they bought too many shows, and their business models could not support these expenditures on programming. So they cut back. The consumer doesn’t care about the business models nor do they read the trades or analyst reports. They became used to the plethora of product and now they do not understand these cutbacks. Strategies to address this issue need to be explored.

When will we learn? When will companies who often say they are “consumer-focused” really become that? How much churn will it take to make the streaming companies truly focus on their customers?

They have their email addresses. They could be conducting research on current subs, on unique subs that are new to their services, on lapsed subs who left and now returned, and on those who have unsubscribed. This very common research program would help improve the current rate of churn that we are seeing, and it also helps the product people prioritize what they need to be working on to make usage of streaming services as easy as it was to watch cable TV.

Do you remember many years ago when everyone hated their cable operator? This was not that long ago. Cable scored some of the worst negatives among subscribers across every other utility. But then operators began to listen to and address the real concerns of their subscribers. That’s what is absent today in the streaming services space – yet it’s so easy to address. Let’s go listen to the customer. Truly listen. And address their issues. It will greatly contribute to your success.

Posted at MediaVillage through the Thought Leadership self-publishing platform.

Click the social buttons to share this story with colleagues and friends.
The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.org/MyersBizNet.