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Streaming services have become essential and have yet to lose their luster in the “gotta have” category of entertainment essentials. People increasingly stay home with overworked exhaustion and the ever-popular working-from-home options. The resulting popularity of streaming services has led to a significant increase in subscription costs and usage of many streaming services.
The trends in great programming and high demand for these streaming services catapult its popularity — but, as with all things, there is another side to the coin. For example, there is growing concern that the sheer number of such services could cause consumer fatigue and rejection. But is that true? We’ll look in-depth at subscription fatigue, how it affects the media industry, and what mistakes companies make that could end their sweet ride.
The Secret of Subscriptions
The concept of subscriptions goes beyond regular payments. It becomes essential to understand how it differs from other recurring revenue models like leases, rentals, and memberships. A subscription is a payment for the future delivery of a product or service that includes some variation.
Related: How to Identify and Launch a Subscription Model in Your Existing Business
While many businesses may use the term “subscription” to describe their model, it’s vital to distinguish it from other types of recurring income. For example, loans, leases, and monthly payments provide people access to a predictable product or service that doesn’t qualify as a subscription. A true subscription model can only garner success depending on the habit strength and usage pattern it creates in its customers.
Nir Eyal, a writer who has studied habit-forming products, has identified four key steps that successful companies incorporate into their customer experience, which he calls the “hooked model.”
- Trigger: encourages people to use the service
- Action: habitual behavior
- Variable reward: satisfies the users’ need for the service
- Investment: makes the service more helpful when used.
Mistakes of Companies
Upon closer examination of the “hooked model,” it becomes clear that many companies make common mistakes when launching subscription services.
1. Too many steps
A subscription service that is more complicated than other solutions is likely to fail. For instance, people are often deterred from such platforms and apps because it can take time to find a suitable movie. Sometimes, the time it takes to search for a film exceeds the time it takes to watch it. Netflix, for example, has a vast selection of options, which is quite different from the DVD rental service that initially brought the company success.
In the early days, customers had to open the red envelope, remove the disc, and insert it into the player. There was no need for decision-making or choice since you watched what you had already selected. Netflix has since capitalized on ease of use as a competitive benefit and is now experimenting with a “Play Something” feature that allows users to start watching something quickly. The service also allows you to line up shows in a queue saving valuable thought processes.
However, Netflix differs from offering a curated selection that meets the viewer’s preferences. Ultimately, consumers want to watch content that appeals to them, and anything that makes it difficult will negatively impact the subscription service’s success. That’s why they should combine quality content with maximum ease of use to avoid provoking user fatigue from subscriptions, which we’ll discuss later.
# 2 Reduced variability and lack of novelty
The primary reason people discontinue subscription services is a reduction in variability. When the number of exciting offerings declines and mundane options increase, customers lose interest and seek alternative services, often cheaper ones.
The good news is that a solution exists to maintain interest in a subscription service and increase the variability ratio. It can be achieved by encouraging users to enhance the service through their usage, which brings us to the investment phase.
# 3 No accumulated value
Although many companies neglect this step, it remains crucial to the subscription service success. During this phase, users add something to the product that enhances it. This increases the likelihood of returning to the platform repeatedly. This principle is known as retained value and can manifest in various forms, depending on the nature of the service.
Examples of how subscribers can add value to a product over time include providing data, publishing content, attracting new users, building connections, and establishing a reputation. In addition, many platforms and apps leverage the “hooked model” to ensure that their subscription service continues to improve as users engage with it.
What is subscription fatigue
Subscription fatigue is when consumers become overwhelmed by the number of platforms they subscribe to. As a result, it becomes difficult for people to track them all. Plus, the constant stream of monthly payments can adversely affect their finances.
In some cases, such fatigue can lead to what’s known as customer churn, where users unsubscribe and switch to other services. It can be especially problematic for subscription-only companies, as it can lead to a loss of revenue and customer loyalty.
Subscription fatigue in the media industry
While subscription fatigue is a problem for all companies operating on this principle, it is especially true in the media industry. In addition to the sheer number of entertaining platforms, you can also encounter the problem of content fragmentation. It means that users must subscribe to multiple services if they want access to all the shows and movies they are interested in.
For example, you must subscribe to Netflix to watch shows like Stranger Things, The Crown, and Orange is the New Black. If you want to watch shows like The Handmaid’s Tale, subscribe to Hulu. And if you’re going to watch The Boys, you need to subscribe to Amazon Prime Video. And this doesn’t even cover the problematic issues when a person is watching a series on Netflix and the continuation of the additional series’ shows (after years) is now on Hulu. What??
Combined, this can lead to high monthly costs, especially if the user wants access to multiple streaming services, as mentioned above. As a result, subscription fatigue has led to several new trends in the media industry. For example, some streaming services now offer packages where consumers can subscribe to multiple services at a discount.
Others are experimenting with ad-supported models, where people get free access to content in exchange for watching ads to ensure a better customer experience. This may eventually serve as a great solution to the current problem. But what more can companies and consumers do to improve this situation?
Solution of the Problem
To fight subscription fatigue, companies can offer bundles and other discounts to make access to several of their products more accessible to interested users. They should likely take time to experiment with several different business models and test these. The business model could include ad-supported models or pay-per-view options to give users more flexibility in accessing content. And if you’re one of those users, it’s essential to be mindful of the subscriptions you sign up for and regularly review whether they’re worth the monthly fee.
Consider which options to subscribe to and prioritize those that benefit you the most — and consider dropping those you use infrequently. However — you’ve already found this out — getting rid of a subscription can be challenging. If you are no longer interested in BET Plus or another streaming service, you can find out how to cancel your BET+ subscription on the Howly consulting service website.
Subscription fatigue is a growing problem for consumers and companies alike. While subscriptions offer many benefits, their sheer number can be overwhelming — leading to decreased customer loyalty.
Subscription fatigue is particularly relevant in the media industry, as content fragmentation across multiple streaming services can frustrate many users. However, by working together, businesses and consumers can find ways to make subscriptions more manageable and sustainable over the long term.
This article is from Entrepreneur.com
