Some­time-stream­ers: TV watch­ers sign up for one show — then can­cel

Austin American-Statesman - - THE PLANNER - By Brian Fung The Wash­ing­ton Post

Win­ter has fi­nally come for “Game of Thrones,” whose lat­est season fi­nale, which aired Sun­day, left the land of Wes­teros in as deep a cri­sis as it’s seen in thou­sands of years. But with the HBO fan­tasy se­ries now on hia­tus un­til at least the end of 2018, some view­ers say they’re tak­ing a break from HBO en­tirely — high­light­ing a chal­lenge fac­ing many en­ter­tain­ment com­pa­nies in an era of con­stant stim­u­la­tion and on-de­mand dig­i­tal ser­vices.

Colleen Mor­ri­son, a “Game of Thrones” fan in New Jersey, signed up for HBO’s on­line stream­ing app in June. Now, Mor­ri­son says, it’s go­ing to be an easy de­ci­sion to can­cel her sub­scrip­tion this week after she watches the season fi­nale a sec­ond time.

“I didn’t mind pay­ing the $15 each month be­cause it’s the kind of show where I wanted an im­me­di­ate view­ing to avoid spoil­ers, but I’m also not in­ter­ested in keep­ing the ser­vice since I’m not in­vested in any­thing else,” she said.

Mor­ri­son is part of a small but savvy crowd of con­sumers who know ex­actly what they want out of their TV ex­pe­ri­ence. Cost-con­scious and em­pow­ered by the in­ter­net’s con­ve­nienceat-a-click men­tal­ity, these con­sumers take ad­van­tage of free tri­als, no-con­tract com­mit­ments and the me­dia in­dus­try’s own strug­gle in the face of tech­no­log­i­cal change to help guard their wal­lets.

Ig­nor­ing the bar­rage of in­house teasers and pro­mos for other re­lated con­tent, these view­ers re­sist the siren song of TV net­works that, more than ever, are be­ing forced to bat­tle one another for at­ten­tion dom­i­nance. An abun­dance of high-qual­ity tele­vi­sion shows from Net­flix, Hulu and old-school ca­ble pro­gram­mers like AMC, HBO and Show­time are help­ing some con­sumers be­come more dis­cern­ing in their tastes — and less loyal. Aban­don­ing one se­ries or chan­nel for another has never been more con­ve­nient or less risky, par­tic­u­larly when many ca­ble chan­nels of­fer stream­ing apps di­rectly to the pub­lic in­stead of through ca­ble com­pa­nies or other tra­di­tional TV providers.

“In a world where you can turn any­thing on and off when­ever you want, you’re al­ways fight­ing for my wal­let,” said Rich Green­field, a me­dia analyst at BTIG. “I can can­cel Hulu or Sling TV or HBO or DirecTV Now — any of these things have be­come ‘point at a but­ton and click.’”

The sig­nif­i­cance of this con­ve­nience is enor­mous.

On tra­di­tional ca­ble, tele­vi­sion pro­gram­mers can eas­ily re­tain cus­tomers be­cause of the chan­nel bun­dle. In or­der to ex­tri­cate them­selves from a sin­gle chan­nel, con­sumers must often weigh the risks of los­ing many other chan­nels and po­ten­tially break­ing off a con­tract with their ca­ble com­pany. Even if it’s a small, pre­mium tier they’re look­ing to shed, cus­tomers still have to brace for a timein­ten­sive phone call with their ca­ble provider, which many find off-putting.

“If I had to go through the whole process of adding ca­ble to my Com­cast pack­age just to watch HBO or any other chan­nel, I would not have done it,” said Mor­ri­son. “I know that’s why my par­ents waited so long to can­cel their pack­age — it just took too much ef­fort.”

Be­cause can­cel­ing some­thing on­line can be so easy, you tend to see higher can­cel­la­tion rates across the stream­ing TV in­dus­try, said Glenn Hower, a se­nior analyst at the mar­ket re­search firm Parks As­so­ciates. Al­though just 1 per­cent of can­cel­la­tions are by view­ers dis­con­tin­u­ing a free trial, many peo­ple ap­pear to be spend­ing a mat­ter of months on a stream­ing ser­vice be­fore switch­ing.

“The churn num­bers tend to be pretty high, in­di­cat­ing there are a sub­stan­tial num­ber of con­sumers sub­scrib­ing to a ser­vice for a short time and then bail­ing out,” said Hower. Stud­ies by Parks As­so­ciates have found that, on av­er­age, stream­ing ser­vices man­age to hang onto cus­tomers for little more than a year. Net­flix en­joys more stay­ing power than most, re­tain­ing cus­tomers for an av­er­age length of 2.5 years, ac­cord­ing to Hower.

Part of the secret to Net­flix’s suc­cess has been a re­lent­less string of suc­ces­sive tele­vi­sion hits, as well as its use of data to de­sign shows that are highly tai­lored to spe­cific au­di­ences. There’s some ev­i­dence that other TV pro­duc­ers are also fol­low­ing this strat­egy; even as “Game of Thrones” was wrap­ping its season fi­nale, HBO made sure view­ers got a taste of its up­com­ing drama, “The Deuce,” which doesn’t de­but un­til Sept. 10.

“Your pro­mos help re­mind peo­ple so that at the end of the month they feel, ‘You know what, I guess we did watch stuff on the net­work this month,’” said Quentin Schaf­fer, a spokesman for HBO. The com­pany hasn’t no­ticed any im­me­di­ate uptick in can­cel­la­tions since the season fi­nale of “Thrones,” but it’ll be at least a month or two be­fore any can­cel­la­tions show up in the num­bers. HBO doesn’t make a habit of dis­clos­ing can­cel­la­tion fig­ures, though.

The idea, in other words, is to hook peo­ple into be­com­ing year­long ad­dicts — which is far eas­ier said than done, par­tic­u­larly when there’s so much other in­ter­net con­tent to con­sume, let alone other TV shows.

“Churn is the killer of all these di­rect-to-con­sumer ser­vices,” said Green­field. “Show­time has the same prob­lem. CBS All Ac­cess. All of these ser­vices have the same prob­lem.”

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