Retail

How Streaming Subscriptions Innovate With Payments And Content

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In the era of streaming entertainment and online news, the number of companies providing digital platforms for content is on the rise. And consumers now have a plethora of choices at their disposal, which creates competition in a space where platforms such as Apple Music and Spotify are looking to attract the same users.

But subscriptions also lets merchants to engage with their customers better regardless of the services or products they buy, according to the PYMNTS Subscription Commerce Tracker. The index notes these kinds of offerings are becoming more common, and the global market for subscriptions is expected to have a value of over $500 billion by next year.

From Hulu to Roku, streaming services are offering new features to help serve their customers who subscribe to content. These are just some of the ways that they are enhancing their offerings — and how the market for subscriptions in sectors such as health and beauty as well as streaming services is faring in the digital age:

The projected over-the-top (OTT) media revenue for 2019 is $22 billion. And OTT services are offering consumers new ways to pay: In December, for instance, news surfaced that Hulu and Venmo linked up to provide Venmo’s payment services to the streaming platform. The company said in an announcement at the time, “At Hulu, we want to bring our viewers choice and flexibility, in as many ways as possible.” The company continued, “From infusing our product with your favorite features like Night Mode on Web to supporting all the devices that matter most to you, we constantly strive to make it easy for you to stream, any way you want.” Those who have an account with Venmo will be able to sign up for a new account at Hulu without entering credit card information. Venmo will appear as an option at the payment screen and either a balance with Venmo or a linked payment will complete the transaction.

Eight in 10 Americans — or 80 percent — have never subscribed to a health and beauty product delivery service. Those consumers, according to a YouGov survey, claim they have never been subscribers of offerings that bring hygiene and health items like shampoo or razors to their residences. At the same time, the organization found that about the same share — or 85 percent — of consumers have never subscribed to deliveries of household goods like laundry detergent and paper towels. But the survey noted that younger adult consumers are apparently more receptive to the subscription box concept than others. The organization also pointed out the subscription box top potential benefit is saving shopping time along with the idea that consumers wouldn’t have to remember to buy a product or run out of an item. 

Netflix saw a record number of 9.6 million new subscribers in Q1 2019. The statistic comes as Netflix said in January that it had added 8.8 million memberships in last year’s fourth quarter — 7.3 million internationally and 1.5 million in the domestically. Netflix had expected to add 7.6 million subscribers heading into the fourth quarter. FactSheet had forecast that Netflix would add 6.14 million international subscribers and 1.51 million U.S. subscribers. Netflix paid net subscriptions increased 33 percent for the full year 2018 compared to 2017 to reach 29 million. Average paid memberships had also reportedly increased 26 percent year over year. Time spent consuming Netflix content represents some 10 percent of total time spent watching TV, at least in the U.S., it was reported at the time.

The projected decline in paid TV subscriptions by the end of 2019 is 5 percent. A report from Convergence Research Group, for instance, found the pace of cord cutting is speeding up. A little more than 4.5 million — or 4.56 million — households are jettisoning pay TV. And roughly a quarter — or 34 percent — of households in the U.S. will lack a traditional TV subscription by the end of 2019. At the same time, the report noted that online video services are positioned to take in $22 billion this year compared to $16.3 billion last year. It was also reported that the number of streaming subscribers will pull ahead of the number of subscribers to pay TV this year based on the top 66 services for online video.

U.S. consumers spend more than $2 billion a month on streaming subscriptions. And streaming equipment makers are expanding their offerings: Roku, for instance, announced at the beginning of this year that it was starting a premium video channel service for a subscription fee. Other players like Obé, which is an acronym for “our body electric,” offer steaming health content: The company has an on-demand fitness platform that is looking to sprinkle a bit of the old Jane Fonda magic into its offerings. Iconic workout videos by the actress from the early ’80s were said to be an inspiration for the offering that seeks to have a more stylish approach to getting fit.

From Roku to Hulu, online streaming services are beefing up their subscription offerings with payment and content features. But subscriptions are also becoming an attractive choice in spaces beyond media and music — take banking: Charles Schwab, for instance, is offering clients financial planning products that are based on subscriptions in the age of Netflix, Hulu and Roku.

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The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

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