The new customer acquisition strategies of streaming services in 2024 and beyond

May 10, 2024
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    In a saturated market, how are OTT platforms acquiring new customers, and keeping old ones, from churning?

    Streaming looks a lot different today than it did five years ago–maybe even a little more glum for some players, like Disney CEO Bob Iger, who’s mourning Disney+’s inability to generate revenue.

    With more streaming subscriptions available than ever, the market has reached a point of saturation. Even Netflix has topped out at the number of US subscriptions it can have–at nearly 75% of the streaming market–making the platform bump up subscription rates, crack down on password sharing, and add an ad-supported tier in an effort to increase returns.

    Customer acquisition strategies in this overflowing market are going to look a lot different from the OTT platform acquisition services of years ago, when it was more of a free-for-all. Here’s just one one example: content exclusivity used to define the medium–but now, multiple platforms have acquired the same shows. The top-streaming show of this March, Young Sheldon, for example, is available on both Netflix and Max. 

    Content might still be king (after all, viewers still prefer a quality viewing experience), but it’s no longer all about exclusivity and differentiating platforms. It’s about bundling and working together to make the subscription landscape easier for consumers–or just consolidating services. Take Max, which combined HBO with Discovery Plus in 2023. 

    It’s also about targeting sports. Case-in-point: the unnamed sports streaming service that ESPN, Warner Bros. Discovery, and Fox are releasing later this year. And it’s about targeting linear viewers with the easiest-to-acquire platform of them all–the one that relies solely on ads and doesn’t require a subscription at all: FAST channels.

    Last year, streaming surpassed cable viewing for the first time. And there are no signs of it slowing down. Yes still, users are cutting back on their spending as their discretionary spending goes down in a cost-of-living crisis. It’s time we learned how to navigate a new landscape for streaming, especially as viewers continue to cut the cord and look to find a better experience through streaming services. 

    The state of streaming today 

    There are over a hundred streaming services just in the US. It’s a bustling market. Last year, according to Nielsen, Americans streamed 21 million years’ worth of content in total–that’s over a 20% increase from the 17 million years’ worth they streamed in 2022. The average person has about three streaming subscriptions. Bring in all the other subscription services available–food delivery, music, and more–and it’s a lot for any consumer to handle. Let’s not forget the practice of churn-and-return. Streaming is a high-churn market–whether it’s due to high cost, or selectively binge watching shows when they come out on certain platforms, and then canceling. 

    In some cases, streamers may only build their audience by attracting customers from other streaming services. Netflix, for example, is projected to lose some of its total share of streamed viewing time to other platforms over the next few years. At the moment, customers aren’t looking to add yet another subscription–rather, they’ll be drawn to consolidated services, more relevant content presented to them, better prices, and better quality content.

    Here are some of the ways streaming services can acquire customers in the crowded OTT platform landscape. 

    1. Personalizing recommendations better than competitors do

    Sure, quality content on your streaming service is important. But leveraging first-party data to know exactly what to show a user on your platform’s homepage and what to recommend for viewing might be even more necessary. This is especially true in the face of platforms no longer holding onto exclusive content, and many shows and movies being offered across multiple streamers.

    Disney CEO Iger even commented on Disney+’s need to offer better recommendations and suggestions–commenting that top dog Netflix’s algorithm functions better in that regard. In their effort to frame themselves as Netflix’s main competitor, Iger hopes to collect first-party data from Hulu’s integration to the Disney platform to make a meaningful difference on this front–like any good streaming platform should.

    2. Bundling up

    Speaking of Disney, the decision to bundle Disney+ and Hulu isn’t the first of its kind. Max combined HBO with Discovery Plus, and Paramount Global has bundled Paramount+ with Showtime. Disney also offers a Disney+, ESPN+, Hulu bundle. Apple and Paramount discussed bundling their streaming services late last year. There are endless bundles and add-ons being operated on streaming platforms. 

    Bundling up between platforms works–and so does bundling streaming services with different subscription services, like Verizon did with a free one-year trial of Disney+ in 2019. The offer led many customers to keep paying for Disney+ even after their free subscription ended–a successful effort at customer acquisition. Bundling across the subscription landscape can be an effective and engaging way to do acquisition–especially since acquisition tends to be an expensive endeavor. With bundled packages, customers are less likely to churn, too–since they have access to more content across a wider range of platforms. 

    3. Going after sports

    Bundling–with its advantages in both acquisition and retention–is most definitely the future of streaming. And so is, increasingly, sports–the last frontier of linear TV. According to Nielsen, NFL games made up 93 of the top 100 most-watched broadcasts last year. Going after sports not only means reaching an untapped linear audience, but it could also mean reduced churn, since sports games are live events and not bingeable TV shows. Streaming services are bundling up for sports, too, while Amazon and YouTube have bought up chunks of NFL games–Prime has Thursday Night Football, while YouTube TV has rights to NFL Sunday Ticket.

    However, the many different platforms that have taken over chunks of NFL games and the piecemeal arrangement of other sports across platforms is frustrating viewers who don’t want to pay for a large range of subscriptions. Bundling is coming into the fore here, too. Disney, Fox, and Warner Bros. Discovery have already partnered up to release an as-yet unnamed sports-only streaming platform later this year.

    The changing OTT platform landscape

    Yes, the streaming landscape is changing. It’s consolidating, adding ads, and new tiers. Many platforms struggle to bring in revenue and compete with Netflix. Acquiring customers is expensive, yet necessary. However, with bundling and sports streaming, customer acquisition becomes part and parcel of customer retention–and the future of the streaming wars looks like it’ll lean toward fewer players, yet wider and better offerings.