The concept that guides digital platforms: Churning

The concept that guides digital platforms: Churning

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The concept that guides digital platforms: Churning



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When digital platforms such as Netflix, Amazon Prime Video, and Disney+ first entered our lives, one of the most important attractions of these platforms was that they offered a lot of content for low prices. However, over time, as these platforms became popular, their numbers increased rapidly and subscription fees increased step by step. At this point today, users need to subscribe to three or four different platforms and pay a significant fee for each of them. When services in different fields such as Spotify, PlayStation Plus, Apple Music are added to these, Subscription fees have a heavy impact on your wallet. That’s why a new concept has emerged that we’ve been hearing frequently lately: Churning.

The expression “churning”, which has gained a different meaning thanks to digital platforms, just like “binge”, is used by users. constantly switching between services to reduce monthly subscription costs It is used to describe. When a content they want to watch arrives on platform A, the user subscribes to platform A, but it does not stay there permanently. If he doesn’t have anything else to watch soon, he cancels his subscription the next month and moves to platform B. He repeats this four or five times during the year, if necessary. In this case, that company has to work from the beginning to return it to platform A, which prevents companies from turning a profit. According to previously shared figures, digital platforms The cost of acquiring new users can reach $200 per user. This corresponds to almost a year’s subscription fee of that user. That’s why companies like Netflix need to retain these users somehow in order to make a profit.

However, as the number of digital platforms and subscription fees increase, this becomes more difficult to achieve. Deloitte Insights’ report on the subject shows that 40 percent of users in the USA Has canceled its subscription to at least one platform in the last six months It shows. We also need to consider that this rate may be higher in countries where economic opportunities are more limited. As a matter of fact, data shared by Forbes shows that while 164.7 million new subscriptions will be created in 2023, the number of subscription cancellations will increase to 140.5 million. In 2022, this figure was 104.3 million. On the other hand, data shared by Antenna shows that the rate of users returning to the platforms where they canceled their subscriptions within a month is only 10 percent. The rate of those who return within three months is 23%, those who return within nine months are 37%, and those who return within one year are 41 percent. In other words, platforms that lose subscribers generally They cannot win back the subscriber for months.

Quantity Is Now More Important Than Quality

For exactly these reasons, efforts to prevent churn are no longer possible today. has become the number one priority of digital platforms. This completely changes the nature of the content produced. Because in order to prevent churning, these platforms need to constantly put new content in front of their subscribers. This creates a new reality where quantity becomes more important than quality.




The concept that guides digital platforms: Churning



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Newly established or growing digital platforms need to offer high-profile content that excites people in order to attract subscribers. Therefore, when we look at the early periods of digital platforms, we see that they released fewer but higher profile productions. House of Cards, Daredevil, Narcos Productions such as have played a major role in the growth of Netflix. Likewise, Disney+ launch The Mandalorian He did it with such a remarkable production. At that time, the production of these platforms was quite limited, but they attracted new users with one or two remarkable productions. Now they are moving forward with a completely different strategy. Because sometimes a documentary series or true crime series can be as effective as a Star Wars series in keeping subscribers. As long as the user finds something to watch on the platform, he postpones the idea of ​​canceling his subscription on that platform. That’s why platforms like Netflix and Disney+ They constantly put new content in front of users. High-profile series such as The Mandalorian, Stranger Things, and The Boys are still being shot, but they now constitute a very small part of the production of digital platforms. Although they are small in number, it is usually these big productions that bring churning users back to the platform they left.

Netflix, Disney, Warner Bros. companies like Paying huge fees to license old popular TV series Actually, this is partly due to this. Despite dozens of new series released every month, the most watched productions on these platforms are often Friends, The Office ya da Suits There are old TV series like. Such long-running TV series play an important role in keeping users on the platform.

Netflix, which has become the first brand that comes to mind when it comes to digital platforms today, seems to have managed to distinguish itself from others in the eyes of users. Because users who churn The platform with the lowest cancellation rate is by far Netflix. Of course, the fact that Netflix’s production is much larger and more diverse than its competitors is also effective in this. about this the worst ones are Apple TV+ and Peacock.

Digital Platforms Come Together to Prevent Churn

Recently in the digital platform market Another popular trend is bundles.so there were package subscriptions. The platforms, which are normally direct competitors, realized it would be best to join forces to prevent churning and created bundles in which they bundled their platforms together. Comcast, one of the leading telecommunication companies in the USA, currently offers its users It offers a triple package consisting of Peacock, Netflix and Apple TV+. Likewise, Disney and Warner Bros. by signing an important cooperation They created a bundle that bundles Disney+, (HBO) Max, and Hulu together.

These packages, which are cheaper than subscribing to these platforms one by one, are both more attractive to new users and They get in the way of churning. Because even if the user cannot find anything to watch on one platform, he does not cancel his subscription because there is something he is watching at that time on the other platform in the package. Thus, all platforms included in that package benefit from this. Therefore, it is thought that these package subscriptions will have an important place in the digital platform market in the coming period. In fact, in the near future, we may start to see applications where multiple platforms are integrated to create a common interface and content library.






Source

https://www.forbes.com/sites/dbloom/2024/05/15/streaming-services-bundle-up-to-battle-rampant-churn/


https://deadline.com/2024/08/streaming-viewership-report-samba-churn-problem-1236044340/


https://www.forbes.com/sites/bradadgate/2024/04/01/reducing-svod-churn-should-be-the-next-priority-with-media-companies/