Why do Netflix and other online video streaming sites retain 49% new subscribers after a year, while news sites — on average — just 25%?
These are median retention rates after one year for new subscribers acquired in 2019 with free trials. The retention for the top six U.S. online video streaming services is based on a June 2020 study by Antenna, a subscription analytics company. Relevant retention benchmarks for news publishers are provided by Piano, following a request from INMA.
An analysis of the Piano data of 285 news sites worldwide by Patrick Appel, the company’s director of research, reveals:
- The top news subscription companies actually beat most online video streaming sites except Netflix; the best retaining publisher in the Piano sample keeps 51% trial subscribers after one year, while Hulu keeps 50%, Starz at 48%, and HBO Now at 43%. Netflix though is a retention leader, as it keeps 65% of its subscribers!
- Apart of the industry leaders, news publishers struggle to retain free trial subscribers — median retention is just 25%. The worst performing publishers keep just 7% of free trialists!
- Academic studies traditionally linked the high retention rates at Netflix and other streaming sites with high perceived value of entertainment content and their personalised recommendation systems. Similar to news sites, engagement was found strongly correlated with retention, and recommenders were effective in driving time people spend watching.
Tactics that work well for video streaming sites might not do similarly well for news publishers:
- While all online streaming companies offer free trials, the news subscribers on free trials — in general, with the exception of the COVID-19 pandemic — retain the worst. Paid trials seem to help publishers select readers with a better to the product, as these customers retain almost double the rate — after a year, 41% are still customers. New subscribers signed up at a full price retain at 45% rate.
- Online video streaming sites usually sell monthly plans only, while publishers actually benefit from annual plans. The annual retention for those is much higher than for monthly plans — the median is 71%, with the top performers hitting 83%.
Banner image courtesy freestocks on Unsplash.