Emerging Technologies Play Critical Role in Optimizing Content Catalogs to Maintain Subscriber Engagement and Reduce Churn
As the streaming and content service provider markets move past the immediate aftermath of COVID-19, which stimulated demand for over-the-top (OTT) offerings through the shelter-in-place period, the industry now faces headwinds driven by rising inflation and the prospects of a global recession.
"The OTT sector is experiencing a major wave of change as consumer attitudes and behaviors rapidly evolve in new directions. A significant pivot is taking place as we moved beyond the pandemic when a slew of new streaming service providers rushed into the market to engage directly with consumers starved for new content and experiences," says Matt McSweeney, Vice President of Sales at TiVo.
Churn rates, for instance, are on the rise as customers surf from one provider to another, chasing the content they want -- dynamically subscribing to new accounts while closing others. This is prompting operators to explore new ways to engage and retain relationships with subscribers.
"There are several reasons for this. Streaming providers have been laser-focused on accelerating the pace at which they bring new content to customers in a hyper-competitive market. However, by shortening their go-to-market timelines, many have not adequately resourced product development, road mapping and audience engagement processes," says McSweeney.
It is a dynamic that has resulted in user experiences that could be more intuitive for end-users.
Other factors affecting the market revolve around technology debt. Many OTT players, he explains, are dealing with previous generations of technology investments that are not always aligned with the capabilities and architectures of emerging technologies.
Managing this added complexity elevates the costs associated with developing, testing and integrating new offerings. With rising production, distribution and user interface costs, some providers have raised prices.
Consumers Strike Back
"Consumers have responded by demonstrating just how fickle they can be," says Jon Heim, Senior Director of Product Management at TiVo. "This has been especially true given how easy it is for them to sign up—and then discontinue—their subscriptions."
While the average consumer household in the United States subscribes to approximately eight video services on demand (SVOD), according to recent survey research conducted by TiVo, how they manage these subscriptions is changing dramatically.
"Many are opting to start and stop subscriptions based on content offerings. In other words, once they have seen the specific shows, movies or games that attracted them to a service, they will cancel subscriptions and switch to another provider that carries the content they are interested in experiencing next," says Heim.
The resulting churn is why a growing number of service providers are developing strategies that utilize new technologies to retain subscribers and increase audience engagement.
Technology and Personalization
Indeed, personalization technologies -- including recommendation engines, catalog optimization and intuitive user interfaces -- have emerged as a key to retaining subscribers. They allow OTT services to create an emotional connection with subscribers that keeps them engaged on the platform.
Good personalization combines metadata based on user behavior with enhanced metadata that accurately derives inferences about moods, tones and themes.
"However, more than simply collecting data about user behavior is required," explains McSweeney. "Effective personalization must leverage emerging technologies -- like artificial intelligence and machine learning -- to create behavioral understanding and marry them with insights about the explored or consumed content. Automatically analyzing how different types of data interact dramatically enhances the ability to identify and correlate information that optimizes content catalog presentation to specific subscribers," he says.
Retention, he adds, is the new name of the game today as OTT service providers face immense costs executing 'win-back' strategies for subscribers they once 'owned.'
To this end, OTT executives must focus on the entire life cycle of the consumer in an integrated manner. Streaming service providers can no longer afford to think of crucial customer activities -- such as marketing, client acquisition, onboarding, engagement and retention -- as separate or discrete operations.
Service providers that successfully entice new customers to subscribe by offering them compelling new content often find themselves 'winning the battle and losing the war' when subscribers leave their service after consuming well-marketed content.
"It is unfortunate because service providers often have offerings in their content libraries that subscribers would find compelling. The problem is that these offerings need to be exposed in an effective and tailored manner," says McSweeney."
New Strategic Imperative
Addressing the subscriber engagement challenge is increasingly recognized as a strategic issue in the industry.
"Like all strategic issues, the first step for OTT executives is to understand the state of resource deployment in the context of current market conditions. This includes taking inventory of tools already at their disposal. The next step is to map the current state to emerging requirements and identify subscriber engagement gaps across the entire customer lifecycle," says Heim.
As the problem statement becomes clear, executives must decide how to execute a solution. Here, they have two choices.
They can build their own customized programs; or
They can buy solutions from providers dedicated to staying on top of user engagement trends -- which, as we have discussed -- is a constantly and rapidly moving target.
"Today, most content owners choose to build their own personalization and engagement engines. That said, we are seeing a growing number of OTT providers conclude that their time and financial resources can be better invested elsewhere. For these providers, purchasing tools that address each stage of the OTT customer lifecycle have emerged as the best choice," says Heim.
This is because developing a search and recommendation platform from scratch is a complex and lengthy undertaking. Many OTT providers underestimate the effort required to design, develop and deploy solutions quickly, efficiently and effectively.
"Providers often find just how hard it is a year or two into the project. By that time, user requirements -- and the competitive environment -- have changed. When it comes to personalization, time-to-market really does matter," he points out.
Personalized Content Discovery from TiVo
TiVo's Personalized Content Discovery solution is uniquely positioned to support OTT providers challenged to improve subscriber engagement across the entire customer lifecycle.
"Our proprietary models utilize enhanced metadata and advanced technologies -- including artificial intelligence and machine learning -- to uncover and harness insights about how people engage with content across various content catalogs," says McSweeney.
"TiVo is the only solution provider whose sole focus and core competency is customer engagement: from direct-to-consumer content aggregation, content personalization products, factual and enhanced metadata and actionable engagement analytics. This allows us to continually feed the knowledge base to update our operational models. TiVo constantly identifies new consumer preferences, allowing us to update and improve the Personalized Content Discovery solution," he says.
Several large OTT provider customers are already leveraging TiVo’s Personalized Content Discovery platform. The comprehensive toolset included in the solution enhances the ability of OTT providers to onboard new subscribers simply and straightforwardly.
"It also allows streaming service providers to maintain high engagement levels, reducing the odds that subscribers slip into the 'win-back' category," concludes Heim.
EDITOR’S NOTE: To read the Q&A or listen to the full podcast interview with Matt McSweeney and Jon Heim click here.