There’s not a bigger, more existential challenge facing the roughly 300 U.S. video-on-demand services than getting subscribers in the door (with the possible exception of keeping those subscribers around once they’re enticed to come in).
It’s only going to get worse in coming weeks. Already, Apple TV+, Disney+, and Viacom’s BET+ will launch in the next few weeks. NBC has begun brand-building ads for Peacock, which launches in April alongside AT&T’s HBO Max and mobile-only startup Quibi. And Disney is nervous enough about its service’s debut that it no longer will run Netflix ads on its TV networks, and is fighting with Amazon about placement on Fire TV devices.
All of which made my recent panel at the Future of TV conference in New York all the more important.
The key question for my crackerjack group of marketing and business-development executives: how do you attract subscribers to your service, amid all this competition, especially if you’re not blessed with a vast library or even vaster marketing budget. The panelists laid out a series of tactics that can give a smaller service a chance to stick out, survive, and maybe even survive in this coming era of Peak VOD:
- Be different. Don’t try to be everything to everybody. The big services havetens of thousands of hours of programming. Rely instead on a tightly focused library you can market effectively and tightly to a core audience. “With the numbers you’re talking about, 300 streaming channels, the key is differentiation,” said Ian Greenblatt, managing director of tech, media and telecom at J.D. Power. “How are you going to find the right content mix, because all content is niche to someone, and all niche content is primary content to someone. So how do you find the right mix?”
- Exclusivity. Different is good. Exclusive is better. If you have content not otherwise widely available, that set of fans will find you. “What they have to their benefit is exclusivity,” said Ronit Schwartz, director of business development and partnerships, media and telecom at Kaltura.” It’s not available in any of the bigger players, so balancing those two is where they could potentially succeed.”
- Know your audience. What do you know who watches your shows? You better have a strong analytics and research group. “One of the biggest challenges out there is understanding your audience,” said Pamela Young, executive director of Valassis Digital. “Your content can be incredible, but if you don’t have the right folks interested in your content, if you’re not reaching them or finding data signals online or offline that can do that, it’s going to be incredibly hard to find subscribers, or for them to stay.”
- Find a dependable source of deep data. A smaller service needs a reliable source of audience data. Otherwise, that analytics won’t be able to provide the deep analysis and smart decision-making about programming, positioning, and more that you need. “If you’re a smaller player, you have to absolutely hyperfocus on your audience,“ Young said. Audience discovery, finding your fans, is a massive challenge amid all the competition for their attention, and you’ll need to search widely for them. “You’re going to have to find them elsewhere, and you’re going to have find them off the platforms you’re typically used to getting them in.”
- Get granular. Go deep on your data, down to why a given fan likes a particular program. Specific shows are more likely to draw niche-service subscribers, so you need to know why they’re coming to you. That’s why Netflix and Amazon put so much emphasis on tracking the first show a new subscriber goes to watch. You need to do the same kind of work. “The closer you can get to your consumer, the more you can tell if they’re truly engaging in your media,” Young said.
- Know what else your audience likes. Take a psychographic approach to understanding your site’s fans, understanding what else they like besides your programming. “Who is that person? What are they doing outside of your service, outside of watching your programs?” Young said. “Are they going to the gym? Are they shopping for particular things? Those are all telling about the lifestyle that that person leads. It’s not too dissimilar to how niche consumer packaged goods are marketing themselves.”
- Give them more of what they want. Netflix has long used data about viewing histories and preferences to tweak what users see next. For instance, the company uses its data tools to serve up different 3-second mini-trailers for the same movie, depending on previous viewing habits. One browser looking at Pulp Fiction may see a clip of John Travolta, while another may see Samuel L. Jackson or Uma Thurman. Even if your service isn’t quite that sophisticated, you still need to customize user feeds to build a deeply immersive experience that encourages them to binge and come back. User recommendations have become “table stakes” for video services, Schwartz said: “But you can use it to alter the entire UI/UX to surface content and put it at the top. There’s no reason my home page should look like your home page.”
- What’s a win? Deciding what counts as success for your service can be difficult, especially because the metrics that matter may vary widely depending on your service’s goals. Apple may give away 250 million or more free accounts in the next year, hoping that TV+ make its iPhones, iPads, and iMacs more valuable to users. Disney+ is competitively priced at $6.99 per month (and is deeply discounted as part of Disney’s $12.99 bundle option of Disney+, Hulu, and ESPN+). But Disney’s real win comes by using the service to feed fans ever more deeply into the Mouse House’s iconic brands such as Star Wars and Marvel. Comcast will give away Peacock to broadband subscribers, and make money from ads while perhaps reducing churn among its internet customers. It may even use Peacock as a beachhead to get cord-cutters back into its bundled pay-TV offerings. When it comes to smaller operators, though, toting up a win can be more complicated. “Do you want a highly engaged audience that is small?” Young said. “Do you want a larger audience that isn’t necessarily that engaged? What value do you bring to that broader OTT environment?”
- Be a buddy. Cherished TVRev colleague Alan Wolk has coined the term the Great Re-Bundling, when all these separate services start to lump back together like Cream of Wheat, looking for partners who can provide additional value to choosy would-be subscribers. It’s not quite here yet (some companies are going to need a bloody quarter or two before they start grouping back together). But trust me, it’s not far away. Focused niche services with good data about their clearly delineated audiences should find lots of potential partners. AT&T’s Crunchyroll, which is part of the VRV bundle of nerd-beloved and serves 2 million paying subscribers the best of Japanese animation, is a good example. “They don’t go everywhere,” Young said. “But the engaged audience is equally as valuable. You think about moving [into] the era beyond this one, and people are bundling [niche services together]. They now have a highly valuable audience that can be bundled with other things and bring more value into that space.”
None of these tactics is a solution by itself. Given the cavalry charge of competition, even all of them together may not sustain some small services currently in the market.
But it can be done. The panelists pointed to DogTV, the 10-year-old streaming site for, I do not joke, dogs left alone by their owners. Those owners pay $9.99 a month for programming designed to keep their pets engaged and not chewing up the furniture. DogTV’s longevity and focus suggest the company has figured something out about surviving.
“It’s quite niche, and people are paying a premium to watch it,” Schwartz said. “I don’t think they could ever go against a Netflix, and they don’t have to.”
If you’d like to hear all of my Future of TV conference panel on getting subscribers into VOD services, with Valassis Digital’s Pamela Young, J.D. Power’s Ian Greenblatt and Kaltura’s Ronit Schwartz, go to this episode of my podcast Bloom in Tech. In the same podcast episode (and conference), I also sat down with Christian Kurz, Viacom’s SVP of Global Consumer Insights, about the company’s new “Power in Progress” report on the changing face of power, and the new roles it creates for brands and marketers.