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‘Super Subscribers’: The Big Disruptors

Consumers are pushing subscription services in new directions to get what they want on their own terms. Our latest study, “Super Subscribers: Disrupting the Subscription Services Model,” explored how consumers choose and use subscription services, including Internet, mobile phone, streaming entertainment and cable TV plans. We found that not only are their service preferences changing, but so too are the incentives that motivate them.

“Super Subscribers,” as we have identified them, are savvy shoppers of subscription services. They once accounted for a small portion of all shoppers, but today they account for most of them.

Super Subscribers are also consumers who are migrating their entertainment content delivery and traditional shopping — through expanded broadband and wireless data pipes — to get the specific content and service they desire, for a better-value price and convenient schedule.

That’s why broadband Internet services and smartphone data plans have the largest subscription bases. Cable TV subscriptions, while still very popular, are seeing a macro trend we identified as “cord-shortening.” The majority are keeping their cable, but downgrading to basic from premium, and supplementing with streaming services. At this moment, subscribers of premium and basic cable packages are roughly the same size; however, basic plans are approaching the inflection point of eclipsing premium bundles.

Streaming content is 50% bigger than basic or premium cable individually. More people are starting to “cut the cable cord” as they migrate to streaming and on-demand entertainment options, but cable shortening is more prevalent than cord-cutting at this point in time. That’s why HBO Now is at a must-launch stage for HBO. Netflix has already surpassed HBO’s subscriber base, and with a shrinking group of premium subscribers and growing streaming subscribers who outnumber premiums by almost 50%, HBO really has no choice.

We found that for entertainment content, be it movies, television or music, the best incentives that attract the most customers are post-purchase rewards offering open loop prepaid cards that can be spent anywhere. When these rewards are branded with the issuer’s logo and have an accompanying offer, they can extend initial subscription periods, and also work effectively to drive cross-sell services.

Post-purchase rewards that offer consumers 20–50% more value — but at the same cost to the issuer which is significantly less than an “instant discount” — are now a very popular acquisition incentive in many key subscription categories.

Our “Super Subscribers: Disrupting the Subscription Services Model” study identifies which consumer groups (including views by income, age and ethnicity) are using disruptive subscriptions the most and how to acquire these customers. The research, conducted online in March, questioned 1,757 U.S. consumers representative of the country’s demographics.

Rodney Mason is group vice president, marketing, at Blackhawk Engagement Solutions.