Welcome to a brand new edition of Spotlight, a monthly series where our in-house experts take centre stage to unpack the digital topics of today with a specialist lens.
This month, WePlay Strategist, Michael Harvey, explores why OTT platforms need to look beyond live broadcast content to combat user churn.
OTT – it’s the buzzword of the sports industry. But, what exactly does it mean? Essentially, the Over-The-Top (OTT) media industry enables everyone from broadcasters, leagues and teams to serve video content directly to fans on a connected device. Brought on by developments in technology and changing user behaviours, the OTT subscription model is a prime example of sports organisations trying to generate D2C revenue through an owned audience.
The OTT market was worth $85.16bn in 2019 and is expected to reach $194.2bn by 2025,* and, with accelerated growth in home media and digital consumption, it’s easy to understand why sports organisations see this sector as a high growth opportunity.
Collective wisdom has it that COVID-19 was the architect of the demise of linear TV and the rise of subscription video streaming. But the fact is, even before we were all working, living and socialising at home, many sports organisations were launching or already had thriving OTT platforms – many of which were conceived as a direct result of declining revenue from broadcasters as users moved away from linear viewership.
Now that OTT is more of the norm than the new, and with WePlay’s roster of clients including UFC Fight Pass, ESPN Player, World Rally Championship, and many more, we understand what the requirements are to develop, launch, and sustain a winning OTT product.
So, what does ‘winning’ in the OTT world actually mean? Well, it’s the ability to not only acquire, but retain monthly subscribers. Many organisations fall into the trap of focusing on subscriber acquisition alone, but it is retention that is the key to sustainable OTT growth. Data from WePlay campaigns suggests monthly subscribers usually account for an average of 85% of subscribers, so with a huge proportion of your audience on short-term commitments, retention is an important, and often underappreciated, area of focus.
These subscribers fit many demographics and have a broad range of interests, many of which are dependent entirely on the platform and content in question. But within the wide range of subscribers, there are clear patterns in terms of their purchase habits & behaviours.
Through the research and analysis of our campaign data, we have identified three profiles of OTT subscribers.
- The Single Eventer
- The Season Subscriber
- The Casual Consumer
The Single Eventer
These are users acquired around a single live event, for example a College Football game, and are often an “easy come easy go” situation – i.e they are relatively efficient to acquire, but highly likely to churn (unsubscribe from the service). Campaigns promoting content targeted at the single eventers have the lowest cost-per-acquisition (CPA) – the easy come – but some of the highest churn rates – the easy go. Usually, this is because the newly acquired subscribers have little knowledge, or interest in, additional content outside of the specific live event that drew them to the platform in the first place.
Combatting this is challenging, but can be impacted by increasing customer touchpoints in the first 48 hours of subscription – a period we’ve termed ‘the post-click window’. The aim is to highlight future upcoming events and immediately available on-demand content, extending the platform’s value proposition beyond the customer’s immediate focus. In fact, when we consider that a majority of these subscribers will be first-timers, it is often a matter of educating them on product features and benefits that enhance the experience. For instance, multi-device logins, downloadable content, and the ability to create personalised playlists are popular features that typically encourage platform usage and thus the continuation of their subscription.
The Season Subscriber
Seasonal subscribers are those who use the platform for content across the playing season, rather than one-off games. Whilst they typically offer more loyalty, that is often dependent on live rights availability throughout the season and can therefore suffer weekly fluctuation if premium games aren’t consistently available. Although their subscription patterns are predictable, with over 90% of season subscriptions occurring in 48 hours leading up to live events, we often observe diminishing returns as the season progresses and the number of available live games decreases.
As platforms are faced with huge potential churn at the end of the season, it is vital to showcase supplemental on-demand content and tease more diverse upcoming content in the wake of live rights to highlight the platform’s value beyond the customer’s original intentions.
The Casual Consumer
Casual, or generalist, subscribers typically display the longest average subscriber duration and the most diverse consumption interests. They are likely to display an interest in, and take full advantage of, ‘beyond-live’ content such as archive, film & documentary, and behind-the-scenes content in addition to the mainstream live events. Providing that content is refreshed and updated regularly, casual subscribers are at the least risk of churn and, those who do, present valuable data to help predict and prevent churn in the future.
Part of our job at WePlay is to understand where a platform fits in the target audiences’ digital habits in order to tailor the product offering and marketing applicably. So, understanding the motivations behind user subscriptions informs our content marketing and platform positioning compared to competitors (and yes, that includes illegal streams).
We know that live events are the lifeblood of any sports OTT platform and subscription trends demonstrate a “heartbeat” pattern around those live events. The “heartbeat” effect is great for acquisition but it is a double-edged sword – the greater the lag between events, the harder it becomes to attract new subscribers and retain current ones. This is particularly problematic when factoring in diminishing returns of seasonal subscribers as the value exchange becomes more unbalanced with every game that passes by.
As the rights landscape becomes more fragmented, developing original ‘beyond-live’ content has never been more important. It has become increasingly difficult for providers to deliver a compelling and comprehensive offering solely through live games and it’s a short-term strategy at that.
The value of ‘beyond-live’ content isn’t merely limited to engaging existing audiences. There is evidence to suggest that on-demand content is a gateway to attracting the extremely valuable and sought-after Millenial & Gen Z audience. These demographics consume up to 4x more non-game sports content each week compared to their Baby Boomers counterparts,** so it’s future-proofing your platform for the future.
As products and platforms evolve to fit the demands of consumers and react to broadcaster negotiations, both marketers and providers need to understand how best to maximise available assets to create the most compelling offer to fans. A balance between live and on-demand content is required for optimal acquisition and retention. However, it’s a goldilocks scenario – too much focus on one will leave you either without the star power to attract fans around key moments or little reason for fans to stay beyond the final whistle.
Interested to know more? Reach out to us at firstname.lastname@example.org!
*Source: Business Wire
***Source: Imagen, via Sports Video Group