Ask the expert on media: How can subscription billing improve the overall customer experience?

Media and streaming services boomed during the pandemic. Audiences, with many other forms of entertainment off limits, turned to streaming in its droves.

The number of subscriptions to online video streaming services around the world reached 1.1 billion in 2020¹ as providers swiftly launched their business models to take advantage of this stellar growth.

If you’re a streaming provider, now is a good time to reflect on progress and consider how to optimize those business models to take advantage of further opportunities.

The global video streaming market is expected to grow at a compound annual growth rate (CAGR) of around 12.2% up to 2027², while the CAGR for music streaming over the same period is even higher at 17.8%³.

A focus on subscription billing can help make the most of this growth.

How can providers meet customer expectations?

To meet the expectations of the new subscribers and ensure retention, providers now need to take a "reality check" on how they can further refine their billing and payments strategy going forward.

After all, it’s one thing to pick up new customers, but keeping them is a different matter.

The quality of content is one measure by which subscribers may choose to switch from one provider to another. But meeting expectations for customer experience is also a key retention factor.

Providers must understand the requirement to drive better customer journeys to encourage customer retention, reduce churn and increase revenue, particularly as subscribers seem unafraid to make a switch.

In fact, 64% of consumers say that they would downgrade or cancel a service to pick up another⁴. This means that providers must stand out from the crowd in terms of customer experience.

Where could payments play a part?

Streaming providers can enhance customer experience by refining their payment strategies, and one good place to start is with debit cards.

Debit card payment and purchase volumes collectively rose a reported 23% year over year in the third quarter of 2020, more than double the pre-pandemic growth rate⁵.

And with a higher volume of payments going through debit networks, even small savings on each transaction could lead positively affect profitability. Routing transactions to the most cost-efficient network can generate interchange savings of up to 50% per transaction⁶.

However, there are many different debit network options and associated fees involved, which means providers could benefit from third-party support.

Worldpay Prime can serve as an effective solution, offering access and connections to most debit networks in the market.

Prime compares debit transaction processing prices and then routes the transaction to the most cost-effective debit network, with data science and machine learning selecting the best network for the greatest savings. Plus, it constantly optimizes so that the merchant has the opportunity to get the best deal.

Prime doesn’t require a significant investment, and Worldpay can provide an impact analysis based on current transaction volumes to demonstrate its potential impact on revenue.

Is it possible to minimize the risk of declined payments?

Another key consideration for media providers is the ability to reduce the risk of authorization issues, such as false declines, and to protect against fraud and lost revenue.

Using a tool such as AuthMax could make a difference here. By analyzing the data from more than 40 billion annual transactions, it maximizes approvals and minimizes false declines.

Designed for any business or organization that conducts e-commerce, AuthMax looks at numerous authorization-related factors to derive the adjustment required to maximize approvals, which is instantly done for each individual qualifying transaction.

It can be easily enabled without engineering or coding investment on your part, which can allow for the capture of higher approvals and, consequently, more revenue almost immediately.

Can providers overcome obstacles with recurring payments?

Subscription-based media services rely on recurring payments and regular monthly fees. But if payment cards expire or are lost or stolen, a customer might have to manually reenter their details. This reduces their seamless experience and may increase the chance that they switch providers.

It calls for a solution that identifies declined cards without relying on the customer to reset their information.

Worldpay’s Account Updater service can help subscriptions continue without interruption, even after card expiry, by automatically checking for changes to a user’s card details.

It could be a powerful choice for handling large volumes of time-sensitive payment data and automatically continuing subscriptions without interruption.

Conclusion:

When optimizing your payment strategies, it pays to have Worldpay as your payments partner. After all, we’re a global partner with access to 146 markets, 300+ payment types and 126 currencies.

Speak to us today to see how we could help you with media subscription billing.

Source references:

¹ Market Watch (2021) Global streaming subscriptions top 1B during COVID. Available at
https://www.marketwatch.com/story/global-streaming-subscriptions-top-1b-during-covid-2021-03-18 [Accessed 22/07/21]

² Globe Newswire (2021) Video Streaming Market Value Anticipated To Reach US$ 843.1 Billion By 2027. Available at
https://www.globenewswire.com/en/news-release/2021/06/15/2247466/0/en/Video-Streaming-Market-Value-Anticipated-To-Reach-US-843-1-Billion-By-2027-Analysis-Covid-19-Impact-Acumen-Research-And-Consulting.html [Accessed 22/07/21]

³ Grand View Research (2020) Music Streaming Market Size, Share & Trends Analysis Report By Service. Available at
https://www.grandviewresearch.com/industry-analysis/music-streaming-market [Accessed 22/07/21]

⁴ Forbes (2021) A Challenge For Video Streamers Will Be Keeping Subscribers. Available at
https://www.forbes.com/sites/bradadgate/2021/01/15/a-challenge-for-video-streamers-will-be-keeping-subscribers/ [Accessed 22/07/21]

⁵ The Wall Street Journal (2020) Payments Companies Give Credit Where It’s Due—to Debit. Available at
https://www.wsj.com/articles/payments-companies-give-credit-where-its-dueto-debit-11604239201 [Accessed 22/07/21]

⁶ Worldpay (2020), Prime Brochure. Available at
https://www.fisglobal.com/en/merchant-solutions-worldpay/products/prime [Accessed 22/07/21]

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