The Next Season of the Streaming Wars
Samsung’s New Streaming Index Provides a Playbook for App Makers to Help them Reduce Churn and Acquire New Subscribers in the Streaming Economy
“There is an app for that.” Smart TVs have never offered more content. From blockbuster hits to obscure documentaries, consumer choice is abundant, but so is the competition for their attention. According to Samsung Ads, time spent watching TV is leveling off, at approximately 3.8 hours a day. With so much content but so little time, what is an app marketer to do?
One thing is for certain: Don’t use the same marketing playbook you’re familiar with for linear TV. The goal posts are not the same. For example, while there are thousands of apps available on smart TVs in 2022, audiences use an average of 3.8 apps per quarter for streaming. This is fractional when compared to channel surfing on TV where the average household watches between 10-30 networks per quarter which means that brand awareness and content discovery have never been more important for app marketers
With that said, let’s break down app marketers' two largest challenges: customer acquisition and retention (churn).
Customer Acquisition
At any given moment, approximately one third (32%) of a streaming app’s audience is new. With so much content at consumers' fingertips, if they can’t find it, and fast, they aren’t going to watch it. Today, smart TV platforms like Samsung’s Tizen operating system offer consumer discovery and recommendation engines that app makers can leverage to reach key audiences when they are ready to explore new content.
When Samsung asked consumers their top motivations for trying new streaming services, cost was a significant factor. In fact, 34% indicated that they chose to try a service because it was free or low-cost. While 32% indicated that they’d try a streaming service packaged at no cost with another service purchased, followed by the ability to watch original content that wasn’t available elsewhere (31%).
Customer Retention
However, acquiring new customers is just the tip of the iceberg. Retention is what lies below the surface. It is massive and for many, largely unknown.
How app marketers address churn is becoming the key differentiator and requires a new mindset to compete in a world where free trials and constant new releases are abundant.
Across the Samsung Smart TV app universe, customer churn averages 50%. This means that half of your acquired customers are up for grabs. How do you retain them? Churn is a particular challenge for the top and bottom thirds of apps in the Samsung ecosystem, indicating that strategies need to be developed to keep consumers coming back once they have been acquired.
When asked what causes a consumer to leave an app, it came down to two main themes: content and money. Nearly 40% of consumers leave an app because there isn’t enough original and exclusive content, while 36% cite cost as a reason to leave.
Conclusion
While there are definitely challenges in the new streaming ecosystem, the future of TV is strong, with opportunities for apps of all sizes and genres.
App marketers must make the best use of the data at their disposal.
Understand new vs. returning users
Look at the difference between light vs. heavy app users. Once you know what makes someone binge vs. ‘drop in’, your programs will strengthen
Not all campaigns are the same. Retention is just as important as acquisition and their strategies should be tailored to each audience
Use data to differentiate yourself from competition and ensure your app stands out to new and returning streamers .
METHODOLOGY
The analysis focuses on Q4 2021, zeroing in on U.S. benchmarks that provide needed perspective to a TV app marketer: audience growth, new users, retention, and churn. The analysis serves as a companion to Samsung Ads’ Audience Advisor for Streaming, which provides metrics at an app-specific level, to comprise an expanded marketing toolkit for TV app marketers.
For this analysis, the universe is TV apps on Samsung Ads’ 45 million opted-in U.S. Smart TVs.
Included are subscription-based (SVOD) apps, and free, ad-supported (AVOD) apps.
Excluded are: apps with an exclusively transaction-based business model (TVOD); apps focusing on a specific sport that was not in session for the entire quarter; and apps that fell below a minimum threshold to provide meaningful results