The phenomenon of subscription creep has led to customers opting for more cunning ways to save money on streaming services. ‘Subscription Hopping’ is one such way where customers get strategic about the SVOD services they sign up for. Shashank Venkat finds ways in which subscription businesses can curb this behaviour
Google ‘subscription hopping’ and you will find a number of links that point to this all-new trend among subscribers. With subscription creep
fast catching up on customers, many are getting increasingly strategic about the particular streaming services they want to access for their entertainment needs. And the arrival of new streaming services such as Disney+ and Apple TV+ means that customers are only going to get more picky about their streaming service(s) of choice as their entertainment budgets are pushed to the limit.
The Wall Street Journal’s Kevin McAllister
was the first person to propose subscription hopping as a way to counter subscription creep. Multiple video subscriptions can quickly add up in an a-la-carte entertainment universe and subscription hopping seems to be one of the few ways to keep your subscription dollars in check.
What is Subscription Hopping?
means that customers sign up to a streaming service only to watch a specific show or shows. In fact, some may even wait for a critical mass of content to hit a streaming service before signing back up to it. For instance, a customer may sign up for Netflix to watch the latest season of Stranger Things, let the subscription lapse and then sign back up only to watch the next show which catches his/her interest. This helps keep their entertainment budgets on track.
It is not surprising that tactics such as subscription hopping are coming to the fore. Most subscribers vastly underestimate the amount they spend on subscription services. Last year, a report
revealed that US consumers estimated that they spent $111 per month on subscription services whereas the reality was that they were spending more than double the amount, $237 on such services. Another report revealed that Australians are wasting a whopping AU$3.9 billion every year on unused subscription services
. Clearly, customers are now willing to break free from this inertia and actively manage their subscription choices to ensure that they are not wasting money.
Five ways businesses can stem subscription hopping
The subscription business model is inherently good since it allows customers to access services at a low cost and gives them the flexibility to opt-in and opt-out of services according to their needs. However, the same advantages turn out to be a double-edged sword for businesses as subscription hopping leads to a decline in Average Revenue Per User
and limits their ability to make accurate forecasts about Monthly Recurring Revenue and Customer Lifetime Value.
Here are five ideas for subscription businesses to limit subscription hopping:
Incentivise long-term subscriptions
– Subscription hopping is easier on monthly subscription plans. Entertainment businesses can curb this by incentivising customers to commit to longer-term subscription plans. This is a win-win for both customers and businesses as subscribers end up paying less per month and media companies have better visibility of future revenue. For instance, Indian SVOD service Hotstar has priced its Premium plan at ₹299 ($4.2) per month or ₹999 ($14) per year. Clearly, an annual subscription plan will work out better for customers.
Leverage data to track subscription hoppers
– Data is the new oil, and subscription businesses have a wealth of data in their hands. Businesses can keep a track of habitual subscription hoppers and float customised offers to keep them loyal to their platforms.
Provide a smooth billing and payment experience
– A good recurring billing system
not only offers the ability to easily manage the subscriber database, but also provides the flexibility to offer usage-based plans that meet the lifestyle needs of a variety of customer segments.
Keep adding value
– Media companies such as Netflix and Spotify are the leaders in their niches through a continuous focus on adding value. This is done through an emphasis on good content, new user experience add-ons and new technological features which keep customers hooked on their platforms.
Build relationships with customers
- Finally, any subscription business is only as good as the customer experience it delivers. It is imperative that media businesses build a superior relationship with their customers by constantly engaging at various touchpoints. Customers find it difficult to hop away from the services they are loyal to!