Video streaming services must do more to convert potential audiences into loyal customers, writes Kantar’s Mark Inskip.
The video on-demand (VOD) industry is accelerating at record speed and many are hungry for a piece of the streaming pie. But, in a landscape of increased choice, intense competition and unpredictable audiences, all industry players need to understand their target market in new and deeper ways.
As competition increases, there’s a question mark over the number of subscriptions consumers are willing to pay for. To get an idea of where the limit may lie, our TGI Global Quick View dataset analysed subscription limits across the globe.
Nearly half of connected consumers (44%) pay for up to two streaming subscriptions, 18% pay for three whilst 7% pay for four or more. Our data demonstrates that pockets are not bottomless and the subscription revenue ‘pie’ is unlikely to keep growing.
In order to keep pace with the acceleration and retain a loyal customer base in a crowded market, subscription, ad-funded and hybrid models need to think beyond a high-quality content offering and tap into the consumer mindset to fully understand consumer attitudes and behaviours.
Whatever the streaming model, understanding what content audiences are attracted to is no longer sufficient. The consumer has total control and it is crucial for media providers and advertisers alike to understand their potential audience and to convert them into loyal customers.
Algorithms only go so far
There’s no denying that streaming video on-demand (SVOD) is now firmly in the mainstream. Our latest DIMENSION data shows that 74% of consumers use SVOD, a paid subscription service without ads, to watch new content. However, 27% of viewers feel that recommendations created by algorithms are not relevant to their interests, preferring to ask friends or family for recommendations.
This data demonstrates that SVOD is often falling short in delivering a quality experience to customers. SVOD providers often miss a trick by relying entirely on algorithms, as algorithms are limited to analysing choices made within a particular service and this information alone is not enough to fully ‘know’ the user.
Fresh, relevant content may be hidden behind a menu of tried and trusted options and viewers may not be able access new content easily, jeopardising customer loyalty as most subscribe to SVOD services to access new content. But there is a solution. To improve customer experience and help win customer loyalty, SVOD providers need to attain insights that show how consumers navigate the vast amount of content available, beyond their viewing patterns on VOD services.
Integrating data for a deeper understanding
Simple algorithmic recommendations can often restrict viewer preferences to a narrow-interest spectrum that’s confined to the platform’s walls. However, a holistic audience measurement provides a ‘bigger picture’ that can be used to fuel SVOD recommendation engines.
Our DIMENSION data demonstrates that nearly half of connected customers (43%) spend too much time searching for a programme to watch on their subscription service, indicating that there’s room for improvement. To boost the customer experience and increase customer loyalty, SVOD providers need to collate strong audience insights.
The most valuable audience insights are derived from a combination of behaviour and sample data. Combining audience data from TV-sets, computers and mobiles can generate consumer-centric insights that will help media providers to understand their audiences’ evolving viewing requirements beyond VOD viewing patterns.
It is this knowledge that will help SVOD providers to make more informed business decisions and a deeper understanding of audiences will work to enhance the viewer’s experience and help to increase customer loyalty.
Ad-funded models also benefit from holistic audience measurement. Relevant advertising is paramount for advertisers on VOD and custom research plays an important role in enabling advertisers to get under the skin of media measurement data. A comprehensive, connected picture of viewer behaviour across platforms allows advertisers to walk in the viewers’ shoes and shows the impact of media consumption on consumer purchasing attitudes.
With currency measurement as the foundation, this connected insight allows advertisers to observe how VOD viewing can influence purchasing decisions.
With great data comes great responsibility
Audiences are expanding their media consumption choices and, as a result, measurement techniques have advanced to reflect the new viewing reality, now controlled by the consumer.
The new viewing reality demands a new relationship with consumer data and cross-media measurement needs to be privacy-safe to meet data legislation and to retain customer trust. Companies do not ‘own’ customer data and must handle it with care – 56% of connected consumers are concerned that more tailored content may mean that their privacy is at greater risk.
Those who handle consumer data have the responsibility to use data properly and to explain the benefits that result from loaning their data. Failing to do this could seriously jeopardise consumer trust which could have a major knock on effect on long term brand loyalty.
Getting the balance right
Increasing amounts of behavioural data are being collected as viewers are consuming more VOD content. But there’s two distinct sources of data that need to coexist to create a connected picture of consumer behaviour – deterministic behavioural data and probabilistic data.
Deterministic behavioural data captures behaviours on a specific media platform or device and probabilistic data is generated by representative audience samples who’ve given active approval to having their media viewing measured.
The industry is recognising that there’s too much focus on deterministic audience measurement, confined within the walls of a given platform or device. To grow audiences and retain customer loyalty, advertisers and media providers need to use both datasets to measure total video viewing, regardless of device and source, to improve the customer experience, meeting current user needs and satisfy the needs of potential customers.
Winning customer loyalty is compulsory for everyone involved in the competitive streaming industry and there’s strong evidence to show that more needs to be done to improve the customer experience.
Right now, it’s a tricky time for brands, consumers and service providers, but all can benefit from insights that go beyond TV metrics, as cross-media audience measurement can help to leverage industry players. Everything is measurable and robust, future-proofing audience measurement is essential for shaping content offering and ultimately restoring advertiser confidence.
DIMENSION is Kantar’s latest thinking on some of the biggest communications planning, buying and measurement issues faced by the media industry. We interviewed 8,002 connected consumers in eight markets (Argentina, Brazil, China, France, Germany, Spain, the UK and the US: 1,000 respondents in each). Collectively, these eight markets cover over two thirds ($400bn) of global advertising spend.
Connected consumers are defined as those over the age of 18 who use at least two of the following: a PC or laptop (at home or at work), a smart TV (internet enabled), a smart speaker or voice-activated device, a personally owned tablet or smartphone to connect to the internet.