Reducing churn is an industry-wide objective: subscription services want to keep all their subscribers engaged and happy with the platform. However, even a platform’s internal view metrics do not give a complete picture of audience viewing habits. Without data from the entire universe of content, attempts to keep subscribers engaged are working from incomplete data.
The key tool to fully understand audience behavior is Affinity. Affinity, in short, is a metric that measures the degree of overlap there is between the audiences of different series. It measures this no matter what platforms these series are available on, or even if they aren’t legally available at all in a particular market. Affinity analysis shows viewership behavior patterns, allowing you to get ahead of viewers and offer them a tempting continuation series that will keep them on your platform.
If you’d like to understand more about how an affinity analysis is calculated, this short article contains a full explanation.
For this article, we will look at the affinity and demand data for the Netflix streaming service in Sweden to outline some specific churn reduction actions the platform could take and then illustrate the impact affinity analysis can have on your OTT business revenue.
Identifying the churn risks of Netflix Sweden’s tentpole Original Series
We start by identifying the platform’s most in-demand Original series in the Swedish market. These are shown in the next chart:
The most in-demand Netflix originals are all highly successful series. All ten of these originals are many times more in demand than the average TV show. The top series, fantasy drama The Witcher, is 10.3 times more demanded than the average series in Sweden during 2020!
The high demand for these series means they are likely driving subscription growth for the Netflix Sweden platform: they are buzzy, must-see TV. But are they also driving retention? Once each series has been completed, where do their viewers go next?
For Netflix, the ideal outcome is that the viewers move on to view another title on the Netflix Sweden platform. 2020 affinity data for The Witcher shows that for this series, that outcome is fairly close to reality.
The highest affinity series to The Witcher is Mixed-ish, a sitcom originally from America’s ABC network. After watching The Witcher, this is the series Swedes are most likely to watch next. While Mixed-ish is not available on Netflix Sweden, other high affinity series like Vis A Vis and The Midnight Gospel are.
In fact, of the top 25 series by affinity, 11 of these series are available on Netflix Sweden. This gives The Witcher an Affinity Score for Netflix Sweden of 44. No title will ever have perfect affinity to its platform and 44 is a high Affinity Score to achieve. From this, we can conclude that The Witcher performs well at retaining Netflix subscribers in this market.
Even better for Netflix, six of these ten Netflix catalog titles with affinity are Originals which are exclusive to the Netflix platform. It happens that the four non-Originals are also exclusively streaming on Netflix Sweden, but appearing on multiple platforms is a possibility for licensed series which would dilute the on-platform value of this affinity.
For a different Original series, The Crown, the affinity to the Netflix Sweden platform is not as strong.
Only 4 of The Crown’s 25 highest affinity series are also on the Netflix Sweden platform. While The Witcher has an Affinity Score of 44, The Crown’s Affinity Score is much lower at 16. Viewers of The Crown are more likely to move on to a non-Netflix series after completing their viewing. This means that The Crown carries a higher risk of churn.
While this article is not focusing on acquisition strategies, note that the series with the highest affinity to The Crown in Sweden skew heavily towards content from Britain. This suggests that one avenue to reduce churn is for Netflix Sweden to acquire more British series to keep The Crown viewers engaged.
Title retention strength is market-dependent
Of course, the titles that viewers progress to after finishing a series is dependent on the market the viewer is located in. Different markets have different trends, preferences and access to titles, and so affinity analysis works best when looked at with a market-specific or regional lens.
To demonstrate this, we will return to Sweden’s highest affinity series to The Witcher. Taking the ten series with the highest, we compare them to The Witcher’s ten highest affinity series for 2020 in neighboring Denmark.
You can see that Danes are likely to move on to a different set of series after The Witcher than Swedes. While the specifics titles differ, the types of shows represented are similar, featuring mostly sci-fi, superhero and animation.
The Witcher’s Danish affinity has more Netflix titles in its top ten and more beyond that in the top 25. This gives The Witcher in Denmark a higher Affinity Score of 48, meaning it is even better at retaining subscribers in that market.
Refining churn reduction priorities with demand data
While Affinity Score and demand can both offer useful insights individually, a title’s power to reduce churn is more accurately measured by a combination of the two metrics. Consider a title that has perfect affinity to a platform: all the title’s viewers will move on to watch another series on the platform. However, if that title has universally low demand then it is a niche title. Promoting this title to the general subscriber base to reduce churn will have minimal impact on retention as few will be interested in that niche.
To combine the metrics, we index both demand and affinity to the highest-scoring title in each category. Here is how five of our Netflix originals in Sweden score on the indexed measures.
To make it easier to see the actionable insights from bringing in demand, we will plot these the indexes against each other for all ten originals we identified earlier as Netflix Sweden’s tentpoles.
Uncovering data-driven insights for churn reduction strategies
The chart immediately reveals some insights that a churn reduction campaign could utilize.
As The Witcher scores highly for both metrics, it sits in the green ‘Tentpole’ quadrant. Titles here are ideal for a platform as they drive not only subscriber acquisition, but also retention. Series in this quadrant should be heavily promoted both internally and externally. At this point, it is important to note that for simplicity the scope of this chart is limited to just these ten Netflix Original series; within the full Netflix Sweden catalog these shows may appear in different quadrants.
In the top left is the ‘Demand driver’ quadrant. Stranger Things has almost as much demand as The Witcher but has a lower-than-average Affinity Score Index within this set of titles. While titles like this are good at attracting subscribers, it can be challenging to stop them churning after consuming the title. To retain subscribers who sign up for Stranger Things, Netflix should identify and promote to them library content that has a high affinity with this show. Swedish affinity data for Stranger Things shows that this means titles like HBO’s The Outsider, AMC’s Preacher and Netflix’s own Wild, Wild Country.
Series in the low demand and affinity quadrant do not have mainstream appeal, but detailed analysis may reveal titles that are key for retaining subscribers in a specific taste cluster niche. These titles may be worth targeted campaigns, but otherwise promoting this quadrant is unlikely to be cost-effective.
Finally, in the bottom right of the chart are niche series with high affinity scores. Lucifer, Dark and Money Heist can all play an important part in reducing churn for Netflix Sweden. Their high affinity to the Netflix platform means that Netflix subscribers are likely to enjoy these series and so they should be promoted internally. Accounts that are at risk of churn could have titles in this quadrant recommended to them, for example via methods like targeted emails, on platform ‘if you liked…’ recommendations and/or ‘watch next’ series suggestions during credits.
Churn Reduction Score integration in platform processes for recommendation personalization
We now have a view of how these ten Netflix original series break down by Affinity Score Index and Demand Score Index in Sweden. To streamline decision making, it is helpful to now convert these metrics into a weighted Churn Reduction Score.
As we are focusing on churn reduction, the effects of affinity is more important than the effect of demand. When combining the metrics, we will therefore factor in affinity as twice as important as demand with a 66% weighting.
Like the quadrant graph, the Churn Reduction Score highlights some lower-demand series whose strength at subscriber retention for the platform may otherwise be overlooked.
It also shows which tentpoles have a higher risk of churn associated. As shown earlier, few Netflix catalog series have high affinity to The Crown with Swedes and this is reflected in its low score. As Netflix is a global platform, there may be markets where The Crown has a higher score. Learnings from these other markets could be applied here to boost the show’s performance.
This score can also be used to guide licensing decisions for platforms. Two series with similar demand in a market should be comparable in cost, but the series with higher affinity will score higher here as it is more valuable to the platform.
Embedding Churn Reduction Scores to optimize OTT Churn Strategy
The Churn Reduction Score provides a way to get an overall prioritization of which of your titles are most effective at churn reduction.
With tighter integration of affinity data and platform watch history, these recommendations can be heavily personalized, recommending the highest affinity series to the subscriber’s watch history that they have not yet viewed.
The above graphic illustrates a recommendation workflow that integrates on-platform viewing data with Churn Reduction Scores. An at-risk subscriber for Netflix Sweden has been identified: in this case they are close to completing the final season of The Umbrella Academy. To reduce the risk, a personalized email will be sent suggesting two other series the subscriber may enjoy.
The title with the highest Churn Reduction Score in this case is Dirk Gently's Holistic Detective Agency. However, this particular subscriber has previously watched that series and so it will not be as effective at reducing the churn risk. The next most effective churn reduction titles, Warrior Nun and Cursed, will be highlighted in the email instead.
This example demonstrates embedding Churn Reduction Scores within the targeted email workflow, but that is just one aspect of churn reduction strategies for OTT platforms. Another aspect is immediately apparent in the example: for this subscriber, Dirk Gently would not be a good choice for the email strategy. However, the show’s relevance to the subscriber’s current viewing is still useful data to surface in a different context. Dirk Gently is an ideal series to prominently feature within a ‘Revisit Old Favorites’ swimlane on the subscriber’s homescreen.
There are many other optimization opportunities from embedding this data, such as determining the ideal order new series should be listed in an ‘Arriving Soon’ announcement, ‘Watch Next’ recommendations directly on credits and deciding which genre swimlanes to display higher on the homescreen.
This study has shown that effective and data-driven churn reduction strategies are not only possible, but also easy to incorporate into existing workflows.
The Churn Reduction Score metric is simple to layer into and improve existing OTT churn reduction workflows.
For important and tentpole series, Affinity and Demand quadrant analysis yield detailed insights into tailored strategies to retain subscribers.
Additionally, the complete series content universe nature of affinity analysis means that with this data, on-platform biases in consumer viewing are eliminated. This leads the way for more effective viewing and more engaged subscribers, which then leads directly to a more repeatable and predictable top revenue line.