TV watching used to be a family affair a decade ago, but today in most households, content watching has become a personal activity. Content meets people at the place, time, and device of choice.
Building a successful OTT service requires understanding your customers and responding promptly to their needs, whether they are content, user experience, or business model-related.
Over 75% of user activity is influenced by personalized recommendations from streaming services.
Your streaming service will succeed if you use data to make informed decisions, in addition to personalization.
For example, you must understand your audience's preferences, spending power, and demographics to come up with a winning pricing strategy for an OTT service,
We’ve been talking about data-driven decision-making. But what is it all about?
A data-driven approach to streaming business involves using facts, metrics, and data to guide every aspect of your business.
How can data help your streaming business?
As streaming wars are heating up, OTT businesses are beginning to realize the importance of data-driven decision-making.
The process of data-driven decision-making begins with collecting data. Once it is collected it needs to be analyzed to give valuable insights. This processed data can take your business a step forward by influencing your audience's viewing choices with personalized recommendations.
Let’s understand how user data can help us improve
- User Experience
- Content Strategy
- Revenue Optimization
1. User Experience
Understanding user behavior is the most effective way to improve user experience. How can you possibly optimize the user experience if you in the first place are not aware of what people do when they visit your website or apps?
Imagine a user scrolling through your OTT service to find something interesting to watch. Now how can you improve the user experience for this user?
The first step is to collect data on how your users interact with your service. Are they easily navigating to the desired content? Is there a difficulty in finding what they are looking for?
Add an easy-to-navigate menu based on your findings. A search bar is something of equal importance, these two options enable the user to browse through your entire video library based on their preferences.
A continue watching section and a customized favorite or watchlist section would let them catch up on content that they had left halfway through the last time they streamed on your platform.
Besides search and navigational menus, there are other ways to improve content discovery. There is nothing that can beat a personalized recommendation when it comes to selecting the perfect movie for the evening.
Personalization relies on the metadata of your content. With the right metadata, you can improve the accuracy of your content analysis, which will lead to better personalization and recommendations.
It has become essential to target users with engagement and retention strategies according to their preferences, consumption habits, and behavior to give them the most personalized experience possible.
2. Content Strategy
Data can tell you which of your content is working and which isn't. You can analyze which genre is popular among which of your audience - say geography, gender, age, and so on. This can help you produce or acquire content based on viewer preferences. Analyze the completion rates of your videos. If you see that most of your users are dropping at a particular point, figure out what is wrong there. This could help you capture the minute details of your viewer preferences.
For instance, if your viewers enjoy shows of genre comedy, you should be having more content in that genre. At the same time, if you notice that only a handful of your subscribers have watched the first season of a show, and among them, a few did not complete the entire season– you should think twice before adding the next season.
There is no doubt that the success of Netflix can be attributed to its content strategy. When Netflix launched the first season of House of Cards in 2013, it commissioned two seasons for over $100 million even before the first episode aired. Do you think this kind of investment was just a big bet? Nope. The direct relationship Netflix shared with its subscribers gave it great confidence in the show's success.
3. Revenue Optimization
Looking into your user data will let you know from which devices they consume your videos. Where do your audiences live and what genre do they consume? Based on this you can come up with an ideal pricing strategy.
For instance, you can have different SVOD plans on different geographies, or group different genres as different subscriptions. You could even come up with interesting TVOD bundles. But to do this you need a good understanding of your audience.
Now that you know how data can help you make better decisions, you must also know how to make meaningful insights
Understanding Revenue Sources
Understanding the revenue stream enables you to predict the pattern of cash inflows. Most importantly, analyzing revenue sources can help you observe ups and downs in revenue trends, and identify the causes.
How to understand your AVOD revenue
When it comes to the AVOD business everything boils down to ad views. You need to know the ad views on each of your videos, and the ad completion rate.
‣ Ad views - are the number of ad impressions recorded ‣ Ad competition - is the number of completed ad views
You also need to know if ads are harming your engagement rate. For instance, if you are placing a mid-roll ad after 50% of a video and you notice a drastic drop in views at that point, it could be because the ad is too long or disengaging. Consider placing skip ad options in such cases.
Also, make sure that ad loads are optimized. Too many ads or lengthy ads can disengage the audience. Make sure the ad length and the content length are well balanced.
How to understand your TVOD revenue
You should have a clear understanding of preferred payment methods, content genres, user renting frequency, and patterns to run a successful TVOD business.
You should also be able to analyze if a particular offer or coupon boosted your sales. This will let you come up with meaningful offers.
Also, if you notice a user buying pattern you could nudge them with interesting bundles via email. For instance, if users tend to rent a movie/show every Friday you could come up with a bundle where they can rent 5 movies at the cost of 4 and share the coupons via email. This way the user spends the same amount of money – which they spend over the 4 weekends of a month. But the catch is that you are slowly getting them to spend an extra day watching your content (the fifth show).
How to understand your SVOD revenue
SVOD is one of the most popular monetization models as it guarantees a regular cash inflow. However, to keep your cash flow regulated and maximize it, you need to understand your subscribers.
You need to know where your users are registering and paying for your service. What kind of payment gateways do they prefer?
Also, consider the registration dates and determine whether any particular marketing campaign prompted the registration. This will let you analyze what kind of campaigns work and what doesn't.
Periodically, track users whose subscriptions are about to end, and send them irresistible upselling offers or discounts to keep them subscribed
Simple gestures like these can satisfy your users to a great extent. After all, the success of an SVOD business depends on customer delight.
Understanding User Acquisition and Churn Rates
It is very important to understand where your users are coming from to strengthen your acquisition strategies. At the same time, it is equally important to understand your churn rates as it helps you understand why your viewers don't return to your service.
The churn rate tells you what portion of your customers leave over some time and why. Analyzing reasons for churn and acting upon it will help you to reduce it over some time.
In case of involuntary churns, such as payment failures, send an email to your users and make sure you win them back.
In case of voluntary churns, such as a small content library, or devices not supported, see what you can do about it and communicate to your users about your solution.
Identify the devices where the churn occurs and determine if there is a specific issue that is responsible. If so, act upon it immediately.
Keeping track of the reasons, geo, and devices of your churn rates will help you improve the user experience.
Also, track the user activity of those who leave your service for different reasons. This will help you identify a churn pattern. When you notice an active subscriber goes through the same pattern engage them with personalized recommendations, emails, and push notifications. If possible, send them exclusive offers and discounts so that they don't leave your service.
Wrap-Up
Collecting data is only one piece of the puzzle. Understanding how to apply it to scale your streaming business is what completes it. Data helps your business prosper by enabling you to predict trends and stay ahead of the competition.