why unsubscribing has never been so popular

The other day I received a non-negotiable annual bill that had swelled from last year. I watched it for a few minutes, resolved to pay it off, then immediately responded by canceling the media subscription at the top of my danger list.

I had cut a discretionary purchase and would be even worse off than before the bill, but at least freed myself from the guilt of rarely using that particular subscription to justify its monthly expense. The victory was mine, really. Opposite, global inflationary pressures.

Apologies for sharing this mundane January non-saga, but its banality sort of is the point. People love to announce when they’ve unsubscribed on a matter of principle.

The motive is at least as often a lackluster financial motive combined with every media company’s biggest enemy: indifference. There is no big break, just a slow fizz.

Churn, that scornful sounding word that businesses use for their customer attrition rate, isn’t as fun a topic to slip into business presentations as growth and growth potential, but it’s getting to be. more and more common in the media world. On the bright side, this is a problem that only comes with the luxury of having subscribers in the first place.

It is a turning point. Consumer choice is proliferating at a time when personal finances are in flux, markets such as subscription video-on-demand appear to be saturated, and demand for certain types of content – from home entertainment to hard news – is coming out. a peak inspired by the crisis.

Add inflation to the mix and the media industry could approach the churn of the century.

For subscription video on demand, Deloitte Global has predicted that by 2022, “at least 150 million” paid subscriptions will be canceled globally, with churn rates as high as 30%. “Heightened” competition will cause churn rate to “accelerate”, even in Europe, where churn rates are typically lower than in the more mature US streaming market.

The good news is that streamers will gain more subscribers than they lose. Additionally, the average number of subscriptions per person will increase, and in markets with the highest unsubscribe rate, people who previously canceled a service may in fact re-subscribe.

Subscriber loyalty

In the news media, figuring out how to both win and retain digital subscribers is a relatively new activity, but of increasingly critical importance.

One need only look at newspapers’ share of the Irish advertising market – which has grown from almost 25% in 2014 to 8% in 2021, according to GroupM – to understand why.

In the Reuters Institute for the Study of Journalism 2022 Trends and Forecasts report, four in five publishers surveyed say advancing subscription and membership strategies is one of their top revenue priorities. most important this year.

This brings the challenge of hanging on to subscribers gained during the Covid-19 crisis and countering “subscription fatigue”. Limiting the churn rate should be part of the skill set.

The Reuters Institute suggests that some publishers will use discounted offers and differential prices, “especially if the economy is down,” while for others the answer will lie in designing new products and new packages. of products.

Indeed, the ability to reach a wider audience through subscription packages is in large part the rationale for the New York Times Company’s decision to acquire the sports news publication The Athletic for a considerable sum of. $ 550 million (€ 487 million).

NYT Managing Director Meredith Kopit Levien told stock analysts last week that The Athletic, in addition to having the ability to grow as a standalone subscription, would also be used to help the NYT enter the market. and give it “a retention advantage”. The company would have “more things to engage with” when talking to customers: “Ultimately you started to hear us talk a lot more about the multi-product pack promise,” he said. she declared.

A similar tactic is at play when video streamers like Netflix and Disney Plus choose to make their services available as part of a package sold by cable and satellite TV companies. These platforms extend their reach, while bundled billing for services reduces the risk of customers canceling any of them.

Netflix, still a leader in the video streaming market, has long been seen as having lower churn rates than its competitors, a belief that appeared to be confirmed in a 2021 study by US research firm Antenna. The same research concluded that among the biggest names, Apple TV Plus had the highest churn rate.

Watch and go

Neither of the two findings should be surprising. Apple TV Plus is free for buyers of new Apple devices for three months if they take advantage of the offer within 90 days. There is plenty of time to watch whatever you want, then skate.

Netflix, meanwhile, is ridiculously savvy in everything from pay-TV partnerships to interface design (those ever-changing thumbnail images) to email marketing. Of course, its diverse, holistic and constantly evolving approach to content also contributes to this. But even its laissez-faire attitude to sharing passwords between households seems smart on the churn rate front: you’re less likely to cancel a service that someone else is also accessing.

The subscription I canceled was managed by Apple, which made it a hassle-free move. I chose the path of least resistance. If I could have delegated the necessary phone calls, I might have dropped another underused subscription first.

But that’s not an endorsement of the infamously common practice of making opt-out a delicate or technically difficult process.

Companies telling subscribers that they can cancel at any time, as long as there is a full moon, an “F” on the day of the week, and they agree to take this short phone questionnaire, do not have as an anti-churn strategy, they have a guaranteed method to deter former customers from returning.

Better to have an easy go, easy come back policy. That way, departing subscribers can focus on their terrible mistake – well, maybe after one or two discounted sweeteners or two.

About Jason Jones

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