Service Stacking: Unbundling to Re-bundle
Before the boom of OTT services overwhelmed consumers with options, cutting the cord in favor of individual subscriptions simplified the viewing experience and was cheaper than traditional cable-TV. This contrasts with today’s consumers who endure subscription fatigue, ever-increasing prices, and confusion over which service is currently offering a specific program. Consumers crave the simplicity provided by the early days of streaming. In the first quarter of 2022, 54% of US internet households subscribed to four or more OTT services, with 20% subscribing to eight or more services. Both providers and consumers recognize the need for simplification, and bundles are one way to achieve this. Parks Associates survey research finds that 56% of OTT subscribers prefer one bill and one account for home subscription services. • To the consumer, bundles provide simplicity, value, and convenience. • To the provider, bundles add value to services, increase long-term ARPU, reduce subscriber churn, and increase customer stickiness.
Personalization and Choice
Consumer expectations of personalized experiences and discovery are higher than ever, with video services and entertainment devices expected to provide user-specific interfaces, search results, viewing recommendations, and advertising. Consumers also personalize their own “service stacks” by subscribing to both large and small services to meet general and niche entertainment needs. As competition grows and churn rates stay high, interactive entertainment can keep customers engaged longer and, most importantly, keep them on the platform longer. Past behaviors and activity on the platform can also provide intelligent insight which can be leveraged to create a personalized experience tailored to specific interests. This will, in turn, keep customers coming back.
5 | © Parks Associates
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