Subscriber Insights Will Help SVOD Providers Avoid Netflix s Inability To Collect Hiccup
29/10/2015
A company not meeting its quarterly earnings expectations is not a major story. Yet, when the world's largest SVOD provider missed its subscriber sign up numbers by 270,000 for the U.S., causing an 8% dip in share price, the reason behind it required closer inspection.
According to Netflix, it suffered from involuntary churn due to an inability to collect , which it attributed to an industry wide switch to EMV (Europay Mastercard Visa) - a method of making credit and debit card transactions more secure. Although common in Europe, the technology, also called Chip and Pin', has been introduced this year across the 1.1 billion US issued electronic payment cards to combat $7bn a year lost due to fraud. Netflix says that with 42 million customers using its service, entirely billed through electronic payment, the impact of the change was a minor tactical issue . However, some experts from the financial services sector point out that the switch to Chip and Pin has been years in the planning and that there are methods of delivering continuity of payments when cards are reissued - like when a card expires, or is lost.
However, for such a highly visible and scrutinised TV industry player, it is clear that the EMV change has, at least in the minds of executives, contributed to the blip. Whatever the validity of the claim, it exposes a more fundamental issue around the challenges of subscriber management.
A little more understanding
Netflix is a juggernaut. The service plans to spend $5 billion on content in 2016 and currently operates in 40 countries serving around 70 million subscribers. Its rise is an exemplar for the ongoing change in TV from a broadcast media to a subscriber centric experience.
Yet the lower than expected subscriber numbers highlights two fundamental concerns that other subscriber based industries have long understood. The first is around the subsection of subscribers that pay for but don't actually use services they are entitled to. For example, health and fitness clubs in the US is an industry worth $27 billion each year, but research suggests that only 18% of memberships are regularly used. In fact, for a small gym to be profitable, it needs to over subscribe by a massive ratio. In the SVOD world, this equates to subscribers signing up for a series like House of Cards or Premier League Football and then simply not cancelling when the series or season ends. It is events like EMV that break the forgotten subscription and causes customers to revaluate their commitments.
The second factor is that subscribers, especially within SVOD, are loyal to content - not brands. Football supporters, whether American or English, follow teams and not the service that provides access. And this makes understanding consumer behaviour critical. In the Netflix example, would a grace period and on-screen pop-up notification that allowed subscribers to watch two items before stopping service have been a better option? It is unclear whether Netflix did proactively email subscribers ahead of the change to engage and promote subscription renewal at a time when there could be a natural break.
Innovation delivers retention
With the rapid rise in broadband adoption, electronic banking capability and a growing global middle class; SVOD providers need to take away a lesson from Netflix's involuntary churn statement and consider how well they actually understand customer behaviour, and whether that knowledge translates to a coherent strategy.
A great example of such understandings are season passes that sign up pay-TV subscribers around sporting seasons that may last only eight months. These passes recognise that it's better to find a deal that suits the viewers habits than miss out on potential revenue from subscribers unwilling to commit to longer 12 and 24 month contracts.
Proactive vs reactive
Pay-TV providers are in a great position to start capitalising on their relationship with subscribers. In a defensive posture this could entail proactive campaigns based on viewing habits to counter the factors that lead to churn. Going proactive and analysing the wealth of data from within subscriber systems and across related data sources can allow for more compelling content acquisition, bundles and cross-selling potential.
Netflix believes the EMV issue will naturally sort itself out in the next few months as everybody gets the new cards. Its international growth is still outpacing its home US subscriber additions and new regions are on the horizon. However, other operators should take heed that ignoring subscriber behaviour can be a costly mistake and the EMV incident is part of a wider technical and cultural shift that will have lasting repercussions.
By Jonathan Guthrie, CEO, Paywizard
Most recent headlines
04/08/2024
Dalet Appoints Santiago Solanas as CEO to Lead Next Era of Growth and Innovation
Dalet, a leading technology and service provider for media-rich organizations, is excited to announce Santiago Solanas as its new Chief Executive Officer (CEO)....
03/06/2024
Dalet and Veritone Reach Agreement to Distribute, Transact and Monetize Media Archives
Dalet, a leading technology and service provider for media-rich organizations, a...
13/05/2024
Entry opens for EU Award for Investigative Journalism 2024
Journalists from the Western Balkans and T rkiye can now submit their investigative stories published in 2023 for the EU Award for Investigative Journalism 2024...
13/05/2024
Sundance Film Festival: London 2024 Announces Repertory Shorts Programme, Three Repertory Features And Three Public Talks
Tickets on sale now London, 13 May 2024 - Today Picturehouse and the nonprofit ...
13/05/2024
In Their Own Words: Audiobooks To Explore During Asian and Pacific Islander Heritage Month
May is Asian and Pacific Islander Heritage Month (APIHM), a time to reflect and ...
13/05/2024
Eurovision 2024: Swiss Singer Nemo Took the Crown, but There's More Talent To Celebrate
From C line Dion to ABBA, the Eurovision Song Contest has served as a launchpad ...
13/05/2024
Eurovision delivers strong Total TV audiences for SBS, with more than 2.2 million Australians tuning in
Eurovision delivers strong Total TV audiences for SBS, with more than 2.2 millio...
13/05/2024
L3Harris and Azerbaijan Airlines Advancing Pilot Training Capabilities in the Caspian Sea Region with Cutting-Edge Boeing 787-9 Full Flight Simulator
L3Harris is pleased to announce that it has secured a contract with Azerbaijan A...
13/05/2024
PBS Stations to Gain Access to Nielsen Local Dashboards
ARLINGTON, Va. PBS has received a significant grant from the Corporation for Public Broadcasting (CPB) to provide PBS Member Stations with Nielsen Local Dashboa...
13/05/2024
IBC2024 Now Open for Registration, Adds New AI Tech Zone
LONDON IBC2024, the broadcast industry's second largest international trade show, is now open for registration. Organizers said exhibition space reservation...
13/05/2024
CNBC: Sinclair Considering Selling Some Broadcast Stations
Sinclair Broadcast Group is reportedly considering selling more than 30% of its broadcast stations according to CNBC....
13/05/2024
Three New Shows on NBC's Fall Schedule
NBC has shared its fall schedule, with three new series set to premiere: Drama Brilliant Minds, with Zachary Quinto; comedy St. Denis Medical, with Wendi McLend...
13/05/2024
Animated Show Housebroken' Will Not Return on Fox
Animated comedy Housebroken will not see season three on Fox. The network said it was pleased with the show's creative, but viewer response wasn't stron...
13/05/2024
Tributes Flow for KTLA Entertainment Reporter Sam Rubin, Dead at 64
Tributes flowed in Hollywood today after KTLA in Los Angeles reported that longtime morning-news entertainment reporter, Sam Rubin, had died Friday at age 64....
13/05/2024
CBS Sports to Use 5G-Connected Cameras to Cover PGA Championship
T-Mobile announced today that it is deploying its 5G Advanced Network Solutions (ANS) to enhance the fan experience as well as CBS Sports' live coverage of ...
13/05/2024
The Film and TV Charity launches fund for Black and Global Majority professionals
Funding will be awarded in three rounds over two years, with applications for th...
13/05/2024
IBC2024 opens for registration and announces new AI tech zone
This years show features an expanded venue including a new AI tech Zone and a second Content Everywhere area By Matthew Corrigan Published: May 13, 2024 T...
13/05/2024
David Loving Named KHOU-KTBU Houston General Manager
David Loving srtarts as president and general manager of KHOU-KTBU Houston May 20. He comes from WOI-KCWI Des Moines, where he was the general manager. Both duo...
13/05/2024
Rick Sallinger, KCNC Denver Reporter, Has Died
Rick Sallinger, KCNC Denver reporter, died of natural causes May 9 in the Denver area. He was 74....
13/05/2024
ABC Renews Idol,' Shark Tank,' Dancing With the Stars,' Others
In advance of its upfront presentation, ABC has renewed American Idol for season eight, The Bachelor for season 29, Celebrity Jeopardy! for season three, Celebr...
13/05/2024
Gordon Ramsay, Fox Launch Bite Food Entertainment Platform
Fox Entertainment and Gordon Ramsay said they have launched Bite, a food brand and entertainment business featuring digital content, live events and consumer pr...
13/05/2024
Doctor Who' Showrunner on What New Doctor Brings to Show
The 15th Doctor in Doctor Who history steps onstage with the show debuting on Disney Plus May 10. It is Ncuti Gatwa, who played Eric Effiong in Sex Education. H...
13/05/2024
SVG Sit-Down: Blackmagic Design's Dan May Explores Addition of Instant-Replay to Davinci Resolve Solution
SVG Sit-Down: Blackmagic Design's Dan May Explores Addition of Instant-Repla...
13/05/2024
For PWHL, Raycom, and Dome, Production of the League's First Season Is More Than Just Covering a Sport
For PWHL, Raycom, and Dome, Production of the League's First Season Is More ...
13/05/2024
When You Aggregate Niche Sports, Suddenly They Become a Big Deal - Glen Killane on the EBU's New OTT Service
When you aggregate niche sports, suddenly they become a big deal Glen Killane...
13/05/2024
SVG Sit Down: NEP Europe President Lise Heidal on Staying Close to Clients and Investing Wisely
Interview: NEP Europe president Lise Heidal on staying close to clients and inve...
13/05/2024
Megapixel's GhostFrame, HELIOS LED Technologies Take Virtual Production to Whole New Level
Megapixel's GhostFrame, HELIOS LED Technologies Take Virtual Production to W...
13/05/2024
SVG College Summit 2024: James Madison University Offers Exclusive Look at Its New Production Facility
SVG College Summit 2024: James Madison University Offers Exclusive Look at Its N...
13/05/2024
Broadcast Innovation in India: As Live Sports Continues To Grow, Industry Leaders Discuss Opportunity in the Subcontinent
Broadcast Innovation in India: As Live Sports Continues To Grow, Industry Leader...
13/05/2024
Netflix ISP Speed Index for April 2024
Back to All News Netflix ISP Speed Index for April 2024 Mulitcolor streaks on a black background curved right to foreground with the Netflix logo N at the top...
13/05/2024
Fala Chen Joins Cast for Edward Berger's 'The Ballad of a Small Player' for Netflix
Back to All News Fala Chen Joins Cast for Edward Bergers The Ballad of a Small ...
13/05/2024
Harmonic Launches New High-Density Remote OLT to Simplify Fiber Broadband Service
SAN JOSE, Calif. - May 13, 2024 - Harmonic (NASDAQ: HLIT) today announced the la...
13/05/2024
FOX Entertainment Announces 2024-25 Program Slate
FOX Entertainment Announces 2024-25 Program Slate NEW AND RETURNING SCRIPTED SERIES FROM CRITICALLY ACCLAIMED EXECUTIVE PRODUCERS, INCLUDING JOHN WELLS, BARBIE ...
13/05/2024
FMX. Stuttgart. April 23-26, 2024
MAX-R Mixed Augmented and Extended Reality Media Pipeline Tuesday, April 23 At this year's FMX in Stuttgart, FilmLight demonstrated a proof of concept co...
13/05/2024
Robin Dibble Joins CODA Audio
CODA Audio is pleased to announce the appointment of Robin Dibble to the post of Global Sales Support Manager. Working proactively with CODA's partner netwo...
13/05/2024
2024-05-13
CUPERTINO, CALIFORNIA Apple Music today announced the release of its 100 Best Albums of all time, a celebratory list of the greatest records ever made, crafted ...
13/05/2024
Q&A with Kai Luke Brmmer as he prepares for Moffie his latest theatrical endeavour
Q&A with Kai Luke Br mmer as he prepares for Moffie his latest theatrical endeav...
13/05/2024
Tonight on Smoke and Mirrors: Mthetho's funeral gets underway, and Thandiswa finds herself trapped inside his casket
Tonight on Smoke and Mirrors: Mthetho's funeral gets underway, and Thandiswa...
13/05/2024
Ballyduff Drama Group hailing from Co. Waterford Scoops Top Award in 2024 RT All Ireland Drama Festival
RT Marks 20 Years as Title Sponsor of the Festival with special anniversary vid...
13/05/2024
New landmark documentary series Stardust on RT One and RT Player
New compelling eye-witness testimony of Stardust fire in RT documentary Series filmed over three years includes interview with Charlie Bird filmed in 2021 N...
13/05/2024
Drug Discovery, STAT! NVIDIA, Recursion Speed Pharma R&D With AI Supercomputer
Described as the largest system in the pharmaceutical industry, BioHive-2 at the...
12/05/2024
Berklee Honors Ledisi, Q-Tip, and Gilberto Santa Rosa at Commencement
Berklee Honors Ledisi, Q-Tip, and Gilberto Santa Rosa at Commencement This years honorary doctorate recipients were recognized for their profound influence as...
12/05/2024
WATCH: Empini' trailer with star-studded cast
WATCH: Empini' trailer with star-studded castThe all-star Empini' cast includes Nambitha Ben-Mazwi, Siyabonga Thwala, Nqobile Sipamla, Owen Sejake and...
12/05/2024
Smoke and Mirrors' fans stunned by Leeroy's funeral outfit
Smoke and Mirrors' fans stunned by Leeroy's funeral outfit Smoke and Mirrors' fans were surprised when Leeroy wore a wedding outfit' to his lat...
12/05/2024
Skeem Saam' fans criticise Sthoko and Babeile's abusive storyline
Skeem Saam' fans criticise Sthoko and Babeile's abusive storyline Skeem Saam' viewers are disappointed with Sthoko and Babeile's abusive storyli...
12/05/2024
Dial It In: Data Centers Need New Metric for Energy Efficiency
Data centers need an upgraded dashboard to guide their journey to greater energy efficiency, one that shows progress running real-world applications. The formu...
12/05/2024
Generating Science: NVIDIA AI Accelerates HPC Research
Generative AI is taking root at national and corporate labs, accelerating high-performance computing for business and science. Researchers at Sandia National L...
12/05/2024
NVIDIA Blackwell Platform Pushes the Boundaries of Scientific Computing
Quantum computing. Drug discovery. Fusion energy. Scientific computing and physics-based simulations are poised to make giant steps across domains that benefit ...
12/05/2024
Nqobile Sipamla portrays Masasa in Showmax's Empini'
Nqobile Sipamla portrays Masasa in Showmax's Empini'Talented actress Nqobile Sipamla discusses portraying an older woman, Masasa in Showmax's upcom...
11/05/2024
Survey: Fubo Boasts High Levels of Audience Attention
NEW YORK FuboTV has released a new study from TVision, which studies TV and CTV viewer engagement, that found ads on Fubo get higher viewer attention levels tha...