Bits and Bytes
April 19, 2024
What does it take to launch a successful direct-to-consumer (D2C) streaming service?
It’s a million-dollar question, we are not gonna lie. When looking at over-the-top (OTT) and video streaming, it's easy to see the proliferation of available services in the entertainment and sports space. These OTT services are naturally in full ‘customer acquisition mode’, especially amid the Covid-19 pandemic, and often target overlapping audiences and sets of consumers. The main obstacle to accessing these audiences is represented by limited resources, such as available free time to watch and disposable income. Hence the popular expression ‘streaming war’ that made the headlines some time ago & became a trending hashtag on social platforms.
D2C didn’t become a trend by chance. It brings increased efficiency, and it enables organisations to maintain more control over the user experience, as well as retain bigger shares of profit. It carries (at least) three key competitive advantages:
- Brand clarity and control: think of a scenario of no competition for ‘shelf space’.
- Reduced time to market: product changes can be executed more quickly and seamlessly.
- Direct business intelligence: the interaction with audiences is direct, and it’s increasingly important for organisations to gather valuable insights and inform their strategies in due course.
In this series of blog posts we explore what we believe to be the four pillars of a successful D2C streaming service. We analyse aspects that are integral to launching and growing services targeting specific audiences, with countless opportunities for monetisation.
Let’s start with customer-centricity, one of the hottest topics in today’s marketing landscape.
Why customer-centricity?
Think about it: it’s not about you, it’s all about your audience. As simple as it sounds, being customer-obsessed when launching a streaming service is paramount. You’ll be surprised to hear that many operators in the D2C ecosystem still struggle to get this right.
Customer-centricity, by definition, aligns your company’s products and services with the ‘wants and needs of its most valuable customers’. Products and services are ultimately created to meet customers’ needs, create experiences to win them over and reinforce their loyalty. Segmenting and profiling customers – by seamlessly analysing available data – is the first step to take towards a more customer-centric culture, focussing on lifetime value as opposed to short-term volumes. That’s how value and experience become the new currency in terms of customer acquisition and retention. An invaluable asset to outgrow fierce competitors, as well as to compete against piracy.
So, what does your to-do list look like when building a customer-centric strategy?
#1. Create a simple offering
The mantra is: don’t over complicate things. Simplifying choice should always be the way to go. Especially in today’s intricate and highly competitive streaming scenario, where many entities are trying to win bigger slices of the addressable market.
The most successful services today are built upon a simple offering: something that sounds like “subscribe now, watch everything, whenever you want”. And yes, your service might include additional elements to deepen the user experience with multiple micro-interactions, yet a simple structure helps to reduce friction for end-users, and doesn’t impact the joy and excitement about the content. Most importantly, it helps to prevent unwanted ‘basket abandonments’ even before the user hits the button ‘Subscribe’.
#2. Encourage sign-ups
Nobody really wants to spend ages filling never-ending forms to subscribe to the service of choice. Simplicity is the keyword, yet again. Subscription processes must run seamlessly – as if they were in autopilot mode – to reduce the risk of incomplete checkouts.
Is there a magic formula? The answer is no, conversion doesn’t happen instantly. It’s the result of repeated testing and refined best practices, integral to building a trustful relationship with the user throughout all stages of the funnel. However, the most recent trends in the streaming space showed how a streamlined, three-step process to sign up can help your conversion rate optimisation. Needless to say, all of the above cannot do without impactful, persuasive copy, to clearly present your value proposition.
On a final note come free trials. Often referred to as a ‘vanity metric’, they are part of our everyday experience, and not limited to OTT platforms. The “try before you buy” culture is well rooted in our lives, and free trials are a valuable weapon to drive longer-term growth for many organisations. It’s still important to reduce friction, though, and that’s where card-less free trials come handy. Exactly, no bank details required, no hassle to try a service as if your customers were regular paying ones.
#3. Understand your audience
How well you know and understand your audience is usually the first indicator for success. Consumers today have a very short attention span, hence the need to engage with them in a timely fashion.
It’s become key for organisations to leverage analytics to derive insights that will define the profile of the ideal customer. Built-in analytics tools are becoming a precious commodity when talking about D2C services. Think of a reliable functionality to track user interactions when using the product, video consumption insights in real time (who is watching what, completion rates on single pieces of content, binge watching trends, etc.), and various other KPIs to analyse purchase behaviours.
The ability to control that precious information can help organisations to refine the archetype of their customers, and at the same time inform business-sensitive decisions, such as content licensing options.
Conclusions
Customer-centricity is not just a buzzword. It’s a blend of processes that help to define the direction of your business strategy when launching a D2C streaming service. In an ever-evolving scenario, dominated by several content giants, there’s little room for mistakes, and putting your customer first is the most profitable long-term strategy.
Follow us, as we analyse the world of D2C in our dedicated blog series. Next one up: user experience.
