Study: Mobile is key to preventing higher subscriber churn

Brief:

Subscription-based services need to provide a positive consumer experience on smartphones to retain viewers, per a survey that mobile-first agency Fetch shared with Mobile Marketer. The smartphone beat out PCs, tablets, connected TVs, smart speakers and other digital devices in helping viewers research, sign up and use subscription services like streaming video, music, gaming and news.
A disappointing mobile experience is most likely to lead U.S. viewers to cancel a subscription, with 52% of survey respondents saying they were more likely to cancel service from their mobile devices.
Consumers are getting more sensitive about how much they spend on subscription services, and 40% said they plan to look into how many paid subscriptions they have in order to cancel some of them. Fetch surveyed 1,500 U.S. subscribers of paid subscription services.

Insight:

Fetch's "Customer Retention in the Subscription Economy" report indicates that U.S. consumers are becoming more discriminating about their spending on subscription-based services, which need to provide excellent service on mobile devices to avoid getting canceled.

"Mobile has become the most important channel for acquiring, engaging, and retaining subscribers," Fetch strategy director Jonathan Liew said in a statement. "As marketers, we need to reduce potential friction. That starts with a delightful mobile experience that keeps subscribers engaged again and again."

Customer retention is especially important as media and tech companies ramp up subscription services for video streaming, gaming, music and news. Consumers are getting overwhelmed by the growing selections of paid subscriptions, with 75% of respondents to the Fetch survey saying the variety of options makes it harder to choose a subscription.

Streaming video is the most popular subscription category — 90% of respondents subscribe to at least one streaming video service — and the market is about to get much more crowded. Disney, AT&T's Warner Media and NBCUniversal all have big plans for streaming platforms to compete with Netflix and Hulu, and Apple will roll out its Apple TV Plus streaming service this fall. Video subscription services also have seen their churn rate grow 10% in the past year, indicating that viewers are less likely to remain loyal, Fetch said. A separate poll suggested that 37% of HBO subscribers likely will drop the channel after hit show "Game of Thrones" airs its finale this month, demonstrating the importance of investing in a wider variety of programming to maintain viewership.

Price discounts are the most effective way to prevent subscriber churn, but marketers can also highlight the value they provide to customers to avoid negative effects on long-term profitability, Fetch said. Seventy-one percent of subscribers are less likely to cancel when a paid service consistently recommends new content or functionality, the survey found. Marketers of subscription services need to boost frequency of usage to prevent higher churn.

Subscription-based services also need to emphasize annual plans whenever possible to retain subscribers in the longer term, Fetch said. Fifty-eight percent of subscribers are less likely to cancel if they’re on an annual plan than on a monthly one. Sharing an account also cuts the likelihood of cancellation by 65%, which means subscription services need to offer family and friends plans to avoid higher churn rates.