Streaming Media
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As subscription fatigue appears to be taking hold globally,
content providers are turning to telcos as a key intermediary between
themselves and the consumer in aggregating subscription services into Super
Bundles.
The global value of the subscription economy is US $331
billion, per Juniper Research, rising to US $996bn by 2028 of which a
quarter will be delivered by telcos believe Omdia.
That’s a startling number backed up by further research that
20% of SVOD subscriptions are already being sold through telcos
globally. Super Bundling subscription hubs are increasingly used by
telcos, banks and retailers to drive customer engagement, build loyalty and
unlock new revenue streams, with 88% of telco leaders planning to
launch a subscription hub, according to digital transaction management vendor
Bango.
Its research also reveals that 35% of US subscribers have
lost track of how much they pay for subscriptions, and that 49% are annoyed
they can’t manage all of their accounts and services in one place. As a result,
nearly three quarters now say they want one single ‘hub’ for subscriptions.
There’s even evidence that suggests 61% of subscribers would pay a
higher monthly bill if subscriptions were bundled.
That’s the background to an upgrade its Bango’s SaaS Digital
Vending Machine (DVM). The white-label solution allows telcos and other
resellers to build fully configured subscription hubs from end-to-end and is
already in use at Verizon and Australian telco Optus for their subscription
hubs Verizon +play and Optus SubHub.
The update (DVM CX) now means that the DVM comes with a
frontend that companies can customise and subsequently launch directly to their
customers — essentially saving them time and money by removing the need to code
the customer interface themselves.
The bundling technology itself hasn’t changed but the DVM CX
now makes creating your own content hub more accessible and feasible. All in,
Bango claim companies can save up to 18 months development time.
As Paul Larbey, CEO explains: "For a growing number of
subscribers, subscriptions are no longer experienced as a series of one-by-one
direct purchases. Subscribers now want to combine services, create bespoke
deals, renew on their own terms, and pay through a single, consolidated,
transparent bill.
“As telcos, retailers and banks start to offer these
sophisticated subscription bundles, the DVM removes the roadblocks. We’ve
streamlined the entire process, while providing access to an ecosystem of over
100 subscription providers.”
Verizon claims that using DVM to build its +play marketplace
has reduced churn by 60-70% on average among its customers. DVM customers pay
an integration fee and recurring monthly license fee that scales as the number
of managed subscriptions grows. Contracts are typically for a minimum of 3
years.
The license fee customers pay to Bango is tiered, based on
the number of subscriptions (not users) that the DVM manages. As customers
launch their DVM offers and the number of managed subscriptions increases, so
the license revenue grows.
Another recent DVM customer is Portuguese high street
retailer Continente. The collaboration allows customers with a Continente
loyalty card to subscribe to Disney+ for exclusive discounts and cashback
benefits.
Last September Bango signed an agreement
with Disney to offer Disney+ to consumers via telco telecom operator
and other service providers via the DVM.
The benefit to Disney (and other content distributors) is a
chance to expand reach in increasingly saturated markets.
Forever Subscriptions
Another trend, has been the growth of what Bango call the
‘Forever Subscription’ – those subscriptions that the subscriber says they will
never pause or cancel. This is something that has come up in every recent Bango
survey.
In the UK, for example, Netflix is the ‘must-have’ SVOD
for UK subscribers, followed (some way behind) by Amazon Prime Video and
Disney+.
Unexpectedly perhaps, NOW – which includes Sky (Comcast)
content – comes ahead of AppleTV+ and Paramount+, potentially because it
incorporates a lot of UK sports coverage.
US compared to UK subs
The average annual subscription spend in the UK has reached
£696 ($886) per year, with 1 in 8 Brits spending over £100 ($127) per month.
The equivalent data from Bango’s US study was 1 in 10 spend over $100. This
means British subscribers appear to be spending more per sub than US
subscribers, given that the average number of subs in the UK overall is lower
at 3.5 vs 4.5 in the US.
The average American subscriber now pays U$924 per year for
subscriptions ($77 per month). A quarter (25%) pay U$100 per month, while 1 in
20 pay over U$200 per month (more than U$2,400 a year), according to Bango
figures. The much-publicized crackdown on password sharing among SVOD services
is only one example of a broader trend, helping drive new sign-ups.
Bango reckons that since password crackdown began, 35% of
U.S subscribers are now paying for a service that they previously accessed for
free. But there’s a limit on household purses. According to Bango data,
continued increases may lead some consumers unable to afford subs, as over half
of them (57%) have discontinued their subscriptions because of unanticipated
price hikes.
Indirect subscriptions growing
As a result, indirect subscriptions (combined subscriptions,
bundles, and third-party selling) have become “a major market”. One in 5 U.S
subscribers now sign up exclusively via indirect means, avoiding the
traditional, direct subscription process.
A third subscribe via another service they already pay for.
“These indirect subscription methods are providing a great way for subscribers
to secure the best deal, with 29% now receiving their subscriptions for free as
part of a bundle,” the company states. “If content providers want to secure new
customers, they can’t rely on direct sign-ups alone. Bundling and other
indirect methods will be vital for driving customer acquisition.”
It’s not just cost either which is driving consumers to
bundled video services. It’s considered a more convenient way of managing a
multiplicity of subscriptions which range from Netflix and ESPN, to Amazon
Prime, Duolingo, YouTube, Peloton and Audible. A third of U.S subscribers
surveyed by Bango say they’re consistently frustrated with how they manage and
pay their subscription bills. Nearly three-quarters of subscribers (73%) want
to access and manage all of their subscriptions via a all-in-one hub.
“Creating centralized hubs that prioritize subscriber
preferences is not only what’s best for consumers but also what’s best for
content providers and subscription services,” Bango outlines. “[Streamers]
invest heavily in growing and preserving their user base to retain a
competitive advantage. Leveraging subscriber-focused central hubs for
subscriptions unlocks important new channels for distribution and fosters an
even larger base of devoted customers.
“If subscriber demands aren’t met, there is a risk that they
turn away from legitimate content providers for good. Almost a third (28%) of
those surveyed say online piracy is the only way to access all of the content
they want in one place.”
The new DVM CX offers telcos, banks and retailers
a means of quickly launching a branded subscription hub with pre-built
templates for desktop and mobile. Among other things it delivers analytics of
the performance of subscriptions, bundles and offers, tracking trends in
activations and cancellations in real time. The update includes a means to
migrate existing, live consumer subscriptions onto a Super Bundling hub with no
loss of service; and automated workflows that instantly activate subscriptions
when customers select an offer.
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