Your subscribers are ultimately what’s going to make or break your subscription video business. Unlike advertising revenue models that require massive amounts of views to make money, the views don’t matter with a subscription-based or SVOD business model, subscribers are what matter.

In order to scale your subscription video revenue, your focus must be entirely about the customer — acquiring them as fans, converting them to be paid subscribers, and last but not least, retaining them as customers for the long run.

The following is a checklist of the essential tools and tactics that SVOD businesses use to improve customer acquisition and retention, which ultimately enables them to successfully scale their subscription revenue.

The foundation of any successful subscription video network is an owned-and-operated website with streaming video. Before even considering launching OTT apps, Video businesses should first focus on building their subscription service on their own website.

It’s a quick, cheap and easy way to get a subscription video service up and running, while still having control over IP and fan relationships. Plus, there are product and tools like Zype’s subscription web player embeds that make it extremely easy for video businesses to start streaming video and building up a subscriber-base on their website.

Although SVOD doesn’t need a massive audience to make money, it does require a moderate to large fan base that is fully engaged. These are the fans that come back, again and again, to watch more content, in addition to following you and your brand on social media or through email. Before a video business starts to scale their subscription revenue, they should already have around 200-300 thousand fans across their social channels and website. Check out the recording of our recent webinar, to find out more about the type of content and size of audiences that works well with a SVOD model.

 ꩄ Leverage Social Media to Migrate Audiences 

Social media platforms are ideal for driving your fans to become premium subscribers. Video businesses should leverage YouTube, Facebook, Twitter and Instagram for both engagement and marketing purposes. Video businesses should continue utilizing advertising revenue from free content on YouTube, in addition to using it as a platform to drive viewers back premium monetized content on their owned-and-operated subscription website.

The biggest challenge for subscription video businesses is churn. Even in the first month, cancellations from monthly subscribers are inevitable, but there proactive ways to mitigate and prevent churn. It’s much more expensive to acquire a new subscriber than to keep an existing one. Although customer acquisition and conversion are important, it’s critical that customer retention remains the top priority to ensure subscription video business’ long-term success.

To learn more about how to scale your video businesses with SVOD, you can check out the following Zype U articles:

Subscription Video On Demand & OTT Revenue

How Subscription Video Businesses Successfully Scale Revenue - A Checklist

Last week, Zype hosted a webinar on video business fundamentals, covering topics like monetization, subscriber retention, and forecasting revenue. Unfortunately, running a successful video business doesn’t stop at just creating content, but that doesn’t mean it’s impossible to pursue your passion. Presenting, we had in-house business experts, Cal Hamilton, Senior Director of Customer Success and Dan Manco, Senior Director of Product Marketing.

Zype University is a self-guided, educational program that helps you build and scale your video business. Over the past couple of years, Zype has helped countless video businesses figure out what works, and what doesn’t. We’ve identified approaches that are critical to OTT success and making money. Unfortunately, these approaches are too often missing, which is why they have become Zype U’s core curriculum — marketing & promotion, content engagement, audience development, and of course, making money. Explore the different courses on Zype University here.

The three main monetization models are Advertising Video on Demand (AVOD), Transactional Video on Demand (TVOD) and Subscription Video on Demand (SVOD). You see these models implemented everywhere; YouTube uses AVOD, Netflix uses SVOD and iTunes uses TVOD.

How should YOU choose a monetization model? Well, it really depends on your content and audience. When making an educated decision to monetize your video content, pay attention to publishing frequency, duration of videos, content focus, audience size, and loyalty.

However, there are absolutely challenges to each monetization model, which begs the question: can you rely on a single model? The hybrid model uses multiple revenue models at once but is tailored to the particulars of the business. Though it’s absolutely possible to make a significant amount of money using only one model, the hybrid approach maximizes your content’s full revenue potential. We also delved into some real-world examples of video businesses that use the hybrid model, including Rooster Teeth & StarTalk Radio.

During the webinar, we asked attendees a couple of questions. Before going over different monetization models, we asked...

After going over the monetization models, we asked...

There was about a 10% increase in those that believe they should use the hybrid model, while no one selected TVOD.

Zype has worked with many video businesses who started out with AVOD and TVOD, but ended up being discouraged by the amount of time it took to generate significant revenue. Though it’s absolutely possible to be successful starting out with TVOD and AVOD, the majority of early-stage content creators/ owners see the most success with SVOD because of recurring revenue.

When getting started with SVOD, it’s critical to consider your product, technology, marketing strategy, and operations.

Of course, just like running any business, it’s not easy. However, there are clear strategies and best practices you can take to maximize revenue.

Speaking of revenue, we saw a clear need for the ability to forecast revenue. During the webinar, Cal, our data and spreadsheet master walked us through the SVOD forecast tool. Stay tuned for a step by step blog post that’ll walk you through this powerful tool. In the meantime, be sure to read the intro to the forecast tool, and follow along during the webinar recording.

But, what if your customers are leaving as quickly as they’re signing up? It’s absolutely crucial that you focus on subscriber retention. To keep subscribers engaged, you should deliver a great viewer experience, communicate with them, keep content fresh and interesting, consider launching a referral program, offer exclusive content and be responsive with customer support.

As always, the webinar wrapped up with a Q+A. If you want to gain valuable insight from the questions answered on air, be sure to watch the webinar recording. After this webinar, we hope that you have a better idea of how to take your video business to the next level.

If you have any more questions- be sure to shoot Cal an email at cal@zype.com or Dan an email at dan@zype.com.

Video Business Fundamentals: Webinar Recap

According to the research firm eMarkerter, in 2017, a total of 22.2 million U.S. adults will have cut the cord on cable, satellite or telco TV service. That’s a 33% increase from 16.7 million in 2016.

As traditional broadcasters continue to offset customer loss with expanded digital offerings, it’s independent influencers and social media stars that have the greatest opportunity to flourish in this new landscape.

With niche content and digital programming on the rise, now’s the time to launch a video subscription business. If you’re already producing daily or weekly content for your website or social media channels…what are you waiting for?

Infographic: Cord Cutting Trends Continue to Rise

OTT has democratized video distribution and created the opportunity for smaller content owners and creators to launch their own direct-to-consumer video business. This also means that it’s more difficult than ever to capture and keep viewers attention. Acquiring subscribers is costly in today’s saturated market, which would be one thing if customers stuck around for the long haul, but that isn’t always the case.

The video industry average for subscription length is 21 months —high churn rates are challenging for subscription video businesses across the board, even for the biggest players in OTT. Although customer acquisition is a vital piece of the puzzle, it’s retention that is the game changer— it’s four times cheaper for subscription businesses to keep existing subscribers versus acquiring new ones.

When it’s so easy for customers to sign up… and cancel, how can content owners combat churn and retain their customers for longer? Here are a few strategies out of the leading OTT services’ playbooks.

 Incentivize Customers to Commit to Longer Subscriptions 

The longer your customers stay subscribed, the less likely they are to churn. Many of the major OTT services are packaging their subscriptions to make it more attractive for customers to commit to longer subscriptions upfront. For example, SlingTV and DirectTVNow offer new subscribers a free set-top device if they pre-pay for the first few months of their subscription.

Smaller services may not have the budget for freebies, but there are other creative ways to incentivize new subscribers to commit to a longer subscription period, whether it’s offering a discount, free merchandise or access to exclusive content. This not only makes revenue more predictable, it also gives content owners a longer period of time to encourage repeat viewing. The more new subscribers engage with your content, the more likely it is they’ll stick around.

 Always Give Your Subscribers Something They Can’t Get Anywhere Else 

If your subscribers have watched everything in your library, what’s the reason for them to stay? The key to customer retention is to have a regular supply of new options that keep your subscribers engaged and gives them a compelling reason to stay.

Netflix’s content strategy has been instrumental in their success and it’s very simple—always have content subscribers can’t find anywhere else. Although Netflix’s library of exclusively licensed content has always worked well for them, it’s their pivot to a steady stream of original content that’s making them the leader of the pack, and services like Hulu and Amazon have followed suit. Their subscribers don’t cancel because they fear missing out on the next ‘13 Reasons Why’ or the next season of ‘Narcos’, it’s why they have the best retention rates in the business.

Leveraging viewer data to continually optimize and improve your OTT service for subscribers is vital to retention. In an industry that’s always evolving, remaining stagnant isn’t an option. The best OTT services constantly experiment and test new things, from content to new user-experiences, and then use that data to refine what it and isn’t working.

Amazing original content isn’t the only thing that sets Netflix apart, they are also the pros at using viewer data to improve their subscribers' overall experience. They pay close attention to their engagement metrics, introducing features to automatically play the next episode and the option to skip an intro that improves their user’s engagement.The easier and more engaging a subscriber’s experience is, the more likely they are to keep the service long-term.

One of the reasons that people prefer their OTT service over cable is because it offers content recommendations. The more personalized your subscriber's experience is, the easier it is for them to find something to watch, the more time they spend with your service and the less likely they are to cancel. All the major OTT services, including Netflix and Hulu, prioritize content discovery because it is essential to subscriber retention.

Churn is inevitable, so instead of putting all your efforts into acquisition take a step back and focus on the entire lifetime value of a subscriber. If you're focused on keeping your current customers happy, you’ll naturally build a service that attracts new subscribers, in addition to keeping your current subscribers. Use your active churn as a learning opportunity to gain insight into what your users want and take action to make improvements.

Ultimately, customer retention comes down to providing an exceptional user experience and having the data to gain the insights needed to improve and refine. Video distribution platforms, like Zype, help content owners run their subscription video business like the pros with extensive analytics and superior content delivery across devices.

How to Reduce Future Churn - Subscriber Retention Tips from the Leaders in OTT

In the last 5 years, OTT has redefined traditional content distribution and ownership, transforming the media and entertainment industry. Now, brands across industries are taking advantage of video and new ways to reach and engage their customers. Like many OTT services, consumer-facing brands are adopting a subscription or membership-based model. It’s the gold-standard for online businesses long-term success, but it’s also what today’s consumer expects— an on-demand, personalized experience that provides ongoing value, not just a transaction.

It doesn’t matter if your offering is a physical product, a service or premium content mix, in order to be successful in today’s evolving market, all brands need to operate as multimedia companies. Video is a powerful medium for marketing and engagement and can help provide ongoing value to your members and subscribers.

Red Bull, for example, took a brand and successfully built a media company - using video and other content to sell their target audience a lifestyle, not just an energy drink. They’ve recently launched a stand-alone subscription OTT service, Redbull.tv, to stream the extreme sports video content they’re known for, along with new programming that includes fiction and documentaries.

 First Things First - Is Your Content Valuable? 

In order for video to add any value to your website, your content must be valuable. This means video that is professionally produced, easily-accessible across multiple platforms and engaging for your audience. Align your content strategy with your brand and your unique value propositions to ensure your video adds value to your customer’s experience.

You can also use video to incentivize an action from customers - whether it’s subscribing, upgrading or continually engaging with your content. There are many different types of subscription and membership websites, what video content your customers consider to be valuable and engaging will depend on your area of expertise and your target audience.

When people sign up for a membership or subscription, they’re looking for a personalized experience that goes beyond a transaction— whether that’s access to premium content, curated products, features, benefits or a community. Your subscribers and members aren’t obligated to stick around, so it’s imperative to provide ongoing and added value to your service with premium content.

Video is the most authentic and direct way to connect with your customers and ultimately helps to build long-term relationships that drive brand loyalty. Educating and engaging your current subscribers or members with video increases the value of your service and helps retain your customers for longer.

Birchbox, the successful beauty subscription service, attributes much of their success to their video content strategy. Birchbox’s teaches subscribers (and potential customers) how to use and get the most out of their products with short makeup and beauty video tutorials. These videos are engaging and valuable for current customers, in addition to being powerful marketing tools to attract and convert new subscribers.

 Reach New Audiences and Drive Subscriptions 

In order to be successful, it’s critical for membership and subscription services to have a marketing strategy that’s focused on customer acquisition. Because video is easily shareable and highly engaging on social channels, it is a very effective way to drive brand awareness, reach new audiences and convert them into paying customers.  Hosting video on your website also helps to increase your SEO rankings and make your content and brand more discoverable.

In order to be effective, it’s important to distribute your video across multiple platforms, including your website, social platforms and even your own branded OTT app, then drive those audiences back to your subscription or membership page with a clear call to action.

 How Membership and Subscription Websites Leverage OTT Video 

In order for your video to offer value to your subscribers and members, you must take distribution seriously. There’s no value in slapping a YouTube video on your website and it may even hurt your brand by appearing amateur. Most importantly free platforms (like YouTube) don’t give you any control over your content.

Using a video distribution service, like Zype, makes it easy for membership and subscription websites to manage their video library, deliver high-quality streams to every screen and have control over their premium content and audience. Zype also gives membership and subscription services control over their content, with the ability to gate and monetize their video in a way that makes sense for their membership tiers and business goals.

Incorporating premium video content into your membership or subscription service will provide value to your customers at every stage. Not only do your customers expect it,  but premium video content attracts and converts new customers, keeps your existing customers engaged for longer and reduces membership and subscription churn.

The Value of Video for Membership and Subscription Websites

As the OTT field becomes saturated, some content owners will fail and some will triumph.  What can be done to assure your OTT video service is among the winners?

Similar to any other product or service, OTT success will be highly dependent on how well the four Ps of marketing: Product , Price , Promotion , and Place are applied and integrated:

𝤿 Are you offering the content your audience wants?

Differentiated and original content stands out in the crowded streaming video marketplace.

𝤿 Can you identify your target audience?

Keep focused—clearly identify who your audience is and what they want.

𝤿 What’s your unique selling proposition?

In order to maintain and grow audience and revenue, it’s important to evaluate what sets you apart to remain competitive with your features, benefits, and cost.

𝤿 Are you charging too little or too much?

Pricing higher than the perceived value or a similar, competitive video service can knock you out of the marketplace—but pricing too low will diminish your perceived value… and ROI.

𝤿 What’s the right pricing structure?

The most popular OTT revenue models are subscription-based and advertising-based, be sure your video distribution platform has flexible monetization options that will enable you to scale and maximize your revenue.

Be sure your product’s look and messaging is consistent and resonates with your audience. Leverage your creative department or an agency like Eclipse Marketing to help you nail down branding.

𝤿 Are you using your marketing budget effectively?

Create a detailed plan outlining your budget and what tactics you’ll use to promote your content and develop your audience.

𝤿 Are you using data to drive your business decisions?

Track meaningful key performance indicators and let those insights inform your business strategy.

𝤿 Is your content exceptionally accessible?

The more accessible your content is, the more discoverable it becomes. Distributing your content across multiple OTT marketplaces increases the chances for it to be noticed, watched and purchased.

𝤿 How user-friendly is your website and OTT apps?

Having a high-functioning website and app user-interface is crucial for both acquisition and retention!  Successful OTT video providers ensure their users have an easy and trouble-free experience, on every screen and device.

Clearly, successfully implementing these four “Ps” of marketing is no easy task. Get more specific details and suggestions for each step in the full blog post “ How OTT Services Can Win ” from creative marketing agency Eclipse Marketing Services, Inc.

For more OTT marketing tactics from Eclipse, you can follow them on Twitter, Facebook and LinkedIn.

Have a question? Get in touch with our guest author, Chris from Eclipse Marketing by sending him an email.

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How Subscription Video Businesses Successfully Scale Revenue - A Checklist

Video Business Fundamentals: Webinar Recap

Infographic: Cord Cutting Trends Continue to Rise

How to Reduce Future Churn - Subscriber Retention Tips from the Leaders in OTT

The Value of Video for Membership and Subscription Websites

Guest Blog: How OTT Services Win - A Marketing Checklist

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