The subscription economy is booming and media and entertainment giants are steering this change. Companies like Disney are cutting out the middle man to create their own D2C platforms populated with owned content. The SVoD business globally still has room for further growth as competition within the space intensifies and more players enter the market.
Yet the same forces that drive consumer desire for content and services risks undermining the business. A business which gives consumers the freedom to cancel every month is an inherently unpredictable one, with a fifth of all subscribers likely to churn. Customer acquisition costs - a combination of content acquisition and marketing - may be rising to unsustainable levels.
As production costs of content continue to rise media companies must increase revenue and reduce the endless cycle of consumers signing up and cancelling subscriptions. Overcoming churn, and incentivising retention are the priorities for ambitious D2C giants as they are for national broadcasters if they are to grow their subscriber or advertiser base year-on-year.
The bottom line is that exclusive content alone may not prove enough for the winning hand. The winner will be the one that combines the content users want with an experience that makes life easiest for them by removing as many friction points as possible.
Ultimately, the future of streaming will be about deploying new integrated experiences that are truly personalised on whatever device and wherever they are watching. Those looking for an edge will need to unlock the absolute best in user experience.
