How the Rise of the ‘Bundle’ is Shaping Media & Entertainment Success
Digitalization is steadily redefining the global M&E ecosystem. Content is pivotal to immersive experiences that are being dished out on-demand. Companies are proliferating their OTT streaming platforms to enable direct and personalized distribution. The efforts to compete for user engagement and innovation includes prominent partnerships and fluid portfolios. Gone are the days when television networks or production houses could rely on limited, single transactional revenue sources. The new wave of subscription-based services is washing out single transactions in the M&E arena. This model has skyrocketed amid the pandemic outbreak, thanks to behemoths like Netflix. As a result, I can see most businesses are creating recurring subscription bundles and videos on-demand.
A more arid monetization environment is urging advertisers and OTT companies to incentivize e-commerce and product licensing. Transforming products into services and modernizing legacy media systems are the key differentiators. An EY research indicated that over 90% of technology firms embrace consumption or subscription business models. Service providers can improve viewership value by offering bundle connectivity customer control over digital subscriptions. These also have to resonate with market trends and customer dynamics.
Amdocs Media recently indicated that around 30% of U.S. consumers tried a new media subscription service in early 2021. They also found that nearly 27% of M & M&E consumers on subscription services is more than $100. Companies are continuously gauging customer experience since COVID-19 for subscriber acquisition and retention. They are also leveraging OTT consumption through virtual concerts, cloud-based virtual gaming, and more. To top the game, service providers must offers tools that help consumers centrally manage their digital subscriptions.
This blog discusses how subscription-centric recurring revenue bundles can holistically transform media & entertainment businesses.
Why revenue bundles over Single Subscriptions?
OTT customers enjoy the flexibility of pay-as-you-go models based on what and when they want it. They also seek the liberty to switch services instantly. Not attuning service offerings to their needs can fuel competitor growth. Fulfilling instant demands with subscription pricing allows the players to understand consumers and foster relationships to generate recurring revenues.
What changes will this shift entail?
This seismic shift from single to bundle subscriptions can fundamentally impact the pricing, obviously. It also affects when and how to plan, create, deliver and invoice new services. As customer experiences change, product development, operations, and sales teams must adapt.
What is stopping M&E Providers?
Developing multiple revenue streams challenge businesses that meet their financial goals based on limited yet dominant revenue sources. Operational silos, outdated incentives, and behavioral inertia hamstring many companies. Also, poor alignment, improper coordination, and slow execution are hindering new revenue growth. Some providers lack the insight to acquire and retain users in a direct-to-consumer equation. Others have investment reservations in analytics as a technology.
Finally, too many companies are apprehensive about exploring recurring bundles with new strategies, operating models, and business-to-consumer culture.
Essentials of Innovative Bundling
1. Diverse Bundles and Strategic Partnerships
I am witnessing many traditional service providers are leveraging triple-play offerings which include an optional partnership with top players. This gives subscribers more a-la-carte options while aligning their S-VOD programming to their preferred brands. Partnering with big players helps achieve high margins from recurring revenue streams. M&E companies can further monetize the famous content and large fan base of these media stalwarts.
This digital entertainment “freedom” bundles connectivity with consumer services to accelerate global CSP strategies. The pandemic has changed the consumer mindset to access entertainment without leaving the house. This opens windows of opportunity to work closely with service providers and bundle online gaming, eCommerce, and VoD services. Media and entertainment players can expect bundled incentives, free trials, and new series streaming to reach a new high in 2021.
2. Bundle in more Revenue with Value
Custom bundling helps diversify your offerings while improving customer value delivery. As an eCommerce enthusiast, I learned the power of bundling from packaged selling.
· First, providers can increase the average order value (AOV) by offering discounts on existing services, making customers buy more.
· Second, they can toss few less popular products into the bundle and increase the “value” of the package.
· Third, introduce new products by coupling them with best-seller programs or services.
Package customization in your bundle expands consumer choice for free and paid services.
3. Create Omni-brand Customer Experiences
Companies are extending branded media experiences and products into social media revenue streams. BuzzFeed, for example, gained prominence as an ad-supported digital publisher with a focus on news and memes. It has diversified into the content of customer interest like food and travel. Thus, diversifying offerings under an Omni-brand umbrella is letting media houses sustain recurring revenues from bundles.
4. Limited Accessibility to Premium Services
Limit complete accessibility to premium media experiences and service benefits to those consumers who are willing to pay.
Companies must also introduce “basic” monthly digital subscription bundles at a reasonable price. Automation software helps measure service performance and customer preferences. This will shape the development and selling of premium “unlimited” bundles.
Analytics-driven Bundle Orchestration
M&E providers must leverage sales and competitor data to build and evaluate their offerings. They need to price their products and market them with new sales and marketing strategies. Scrutinizing historical sales and competitor data improves bundling relevance. It also helps converge discrete bundle components based on the buying intentions of customers.
Businesses need to quantify digital experiences, both good and bad, with KPIs and service continuity metrics. Companies must also track their fixed assets that are physically located at the customer’s site. They need to evaluate if the equipment is well-maintained and operating correctly. Customers may not purchase repairs for purchased equipment.
Media service providers must evaluate the OPEX associated with devices in customer locations. This will help generate higher ROI from existing equipment without additional costs.
Technology Enablement
Disconnected systems for quotations and revenue collection can strain subscription models. In a recurring revenue model, outdated systems can be cumbersome and lead to revenue leaks. The adoption of ML algorithms and intelligent automation can reduce repetitive monthly billing tasks.
AI-enabled systems can minimize disruptions in service fulfillment and reporting. Data-centric integration can help use legacy ERP systems in the cloud. This will help track the entire lifecycle, including customer quote, request management, billing, and revenue generation.
Parting Words
OTT streaming has created a world of infinite options and possibilities. Strategic branding will require service alignment to premium subscription packages. Extensive viewership choice has diluted brand value. However, recurring subscription bundles present an opportunity to leverage brand equity and empower customers with more choices. Do you agree to this shift? Let me know.
About Author:
Saumil Shah, the CSO at Rishabh Software, is a technocrat with a successful track record of helping clients solve complex business problems. Under his strategic presidency, Rishabh has established a prominent market presence across multiple domains like Healthcare, Retail, Manufacturing, FinTech & more. He is an alumnus of IIT-Kanpur & London Business School and has been on the advisory panel of industry-leading bodies like NASCOM and GESIA. When he’s not busy solving business technology challenges, he enjoys playing tennis or football.
