It’s Time To Talk (Out Loud) About Churn
The Problem
A trove of media outlets are highlighting the importance for television executives to find new ways to combat churn. Variety examines, among other things, churn rates by age group and the results are damning, with some young viewers churning up to five times a year. The younger the viewer, the more they churn. Featured in TV Technology, churn rates are broken down by Antenna to reveal that in Q3 alone over 32 million subscription cancellations occurred. The Digiday Podcast recently featured entertainment expert Eunice Shin to discuss churn rates and how streaming companies are competing on content turnover and generation. Determining what shows, sport packages, and perks each of these platforms has to offer is one thing. How entertainment marketers are captivating audiences, is another. It’s time for the entertainment marketing community to face churn head on in marketing and messaging.
Not Ready For Not Prime Time: A History
Entertainment marketing is not used to churn. Entertainment marketing spent most of its past entertaining people and marketing with a clear message that let people know what times things were premiering (TV). The television broadcast stations (ABC, CBS, NBC, FOX) were piped into the customers’ homes for free. And, considering that by the time Netflix came around, most everyone had cable, even those channels were essentially taken for granted, piped into the homes of most viewers. Entertainment marketers were charged with getting people in front of the TV at the right time on the right day. And in recent years that even changed from messaging a premiere time or tune-in time to a simple 'set your dvr' message for a broader watch window. Not an easy task, but not one that required getting the customer to plunk down their credit card monthly for a subscription. Entertainment marketing was about entertaining audiences with CTAs about awareness pure and simple.
Conflicts were fought out at the cable television level. If a consumer was upset about their cable bill, they complained to their cable company. Even if the cable company threatened specific content providers – as they still do during Go Dark Campaigns (we’ve all seen the threats… “Optimum may drop all Fox programming… Call now!) – customers were still fighting a large scale fight with their cable company, not specific subscriptions that they had with specific content providers like Paramount, AMC Networks, ESPN, et al.
The entertainment marketing community is facing new challenges to reach their audiences when it comes to churn. Streaming options are more competitive than ever and the economy is making the masses more cost-conscious. Marketers have the tools to create awareness, they have tools to entertain, but I’d argue that the tools they’re currently using for retention purposes are being misunderstood (or, worse, ignored) by viewers.
Current Retention Strategies Aren’t Working
Mainly because all the messaging is being perceived as nothing more than “promos” for the services rather than the more dire and subtle message of 'please don’t leave.' The retention strategies might feel like they’re set up to combat churn, but to viewers the ad units feel like traditional 'promos' for new content or specific content messaging. More content. Different content. New content. They don’t come out and address the problem of churn directly. And in a market this tight, I think it’s worth addressing the problem head on. Retention ads don’t come out and address the subtle fact that the customer is thinking of leaving or may have already left or have left before with plans to come back if something tickles their fancy.
Moreover, because many of these retention ads air on linear channels, as cross-channel ads for the same station-groups as the respective streaming service, they can also be confused to be acquisition ads. Ads that air on linear channels owned by streaming networks, often running cross-channel (Peacock/NBCU, Paramount+/Paramount, Disney+/Disney, Hulu/Disney, AMC+/AMC Networks, etc.), are all retention ads perceived as promos, rather than ads that specifically combat churn.
The levels of churn are such that streamers need to do this to lure back customers.
New Ideas To Face Churn Head On
Everybody and their brother knows that 2023 is a reckoning for the streaming services and the entertainment industry writ large. It’s been covered in both trade and consumer publications and it’s a hot topic from Wall Street to Main Street. So why be silent about the problem of churn if everyone is experiencing the same problem and in such a public setting? The notion that it would be perceived as desperate to come out and name the problem publicly seems to be an issue of innovation and technology rather than humility.
We’ve seen brilliant ads for Brand Awareness for Paramount+ and Pluto and Netflix and Amazon Prime. Awareness of BRAND and Acquisition of CUSTOMER – entertainment marketers have got down. We’ve seen the smart awareness and customer acquisition plays at Apple – buy an Apple device, get Apple+ for three amount of months – and at Verizon with the Disney+ bundle. I’ve already argued that Retention of CUSTOMER spots, campaigns, and messaging are murky at best and are really about acquisition of new customers or maintaining existing customers (but do little to fight churn head on). These are all great ways to bring in new customers.
So where are the ideas for Prevention of CHURN? We need new ad units – in and out of platform – devoted to combatting churn. A lot could be learned from the lessons of loyalty programs and clubs as well as lifestyle bundles.
One almost never hears about customers churning out of Amazon Prime Video because Amazon Prime membership is such a compelling value proposition. It’s a loyalty program with real benefits. It’s the original lifestyle bundle that every brand is chasing. See Paramount+’s new deal with Walmart+. But these two aren’t the only game in town. Where are the other lifestyle bundles and why aren’t they happening? There are plenty of other retailers who would benefit from deals with streaming services if only to combat churn. Exclusive gift cards available via QR code only available to churning customers is one way to do it. It’s something worth trying. The technology is only getting more sophisticated and should be able to handle any churn-based click through protocol with giveaways easy to disseminate with promise of staying in platform.
Disney has a rewards program with Chase to get cardholders perks at Disney parks, but it’s also rumoured to be launching a rewards program to rival Amazon Prime. Attempting to churn out of Disney+ may soon lead to a Park Perks incentive to stay, an offer well beyond anything the Mickey Mouse Club could have ever imagined. Disney and Peacock have many tools it could use to prevent churn, starting with the use of theme park discounts and giveaways.
Content that used to be considered 'DVD Extras' (now relegated to social media and YouTube) could be held back and reimagined to be more exclusive for viewers who threaten to churn out. Again, available via a simple QR code after committing to stay in the service for another month or two.
There are also simple loyalty club ideas, such as for every six months spent in a service, users get a seventh month free. This seems simple enough. It’s a discount, yes, but for a group of people who churn in and out at whim, it’s a much better alternative than losing that customer three to five times a year. And with real loyalty clubs, the longer you’re a customer, the more value you earn. Hook this up with a retailer and we’re back talking about lifestyle bundles.
Right now when someone signs on to binge a new premiere there are no incentives not to churn out except another new premiere that paradoxically invites churn after that premiere runs out. Instead of serving up new or hit content after the last episode of a big premiere is binged, why not an incentive not to churn at all? Such as more exclusive content for that title only available if you stay in the service? Or an ad that comes right out and says, if you’re thinking of churning out of the service, remember what you get if you stay (and I’m not talking about more content), I’m talking about perks. Streaming services want to set it and forget it when it comes to memberships and that’s just not a reality with the number of churners they have at this juncture. More has to be done.
On Netflix there are no cancellation ads (on desktop). When you hit CANCEL MEMBERSHIP (on desktop) you’re brought to a flat screen offering you a discount, a link to compare plans, and tiles of programming to check out – urging you not to leave. There is no sizzle reel. There is no commercial confronting the fact that you’re about to churn. There’s no one trying to convince you that this is a bad idea. There’s no QR code bringing you to a whole other world of messaging. This is a one-to-one transactional moment. The audience is seriously captive. This is the time to strike with bold messaging. And there’s nothing but a static screen with programming tiles and a small discount. This makes no sense. These people are actively churning and nothing is being done about it. We have to do better.
What Is Next
As churners continue to churn and burn with no incentives not to do it on a whim, streamers and the entertainment marketers who work for them will have to find new, innovative ways to stop them. These are just a few ideas as we face a new year of challenges. But I do think it’s time to talk out loud about churn. Everyone else is.
