VOD companies and mobile operators had launched 452 bundle or add-on partnerships by the end of Q3 2020 (according to Omdia). The average telco has 1.9 VOD bundle partnerships while the average consumer subscribes to 3 to 5 different VODs.
This means consumers are subscribing to the rest of the streaming services directly, while telcos leave opportunities for better subscriber acquisition, loyalty growth and revenue on the table.
Telcos leverage VODs to upsell premium service packs and keep their users loyal. However, the value of a bundle to consumers fades over time. When users sign up for a bundle, the content from the streaming service is new and fresh.
VOD churn shouldn’t mean churn for telcos
But new content eventually runs out while subscriber churn increases. The two primary reasons for cancelling a VOD subscription are high prices and lack of content. In fact, 46% of consumers cancelled a streaming service subscription in the second half of 2020.
If the VOD is bundled with the telco and the subscriber wants to stop paying for it, the only way to do it is to downgrade their telco service pack as well. By bundling several services, telcos give their subscribers an alternative choice.
Multi-VOD bundles increase subscriber stickiness
Multi-VOD bundles give subscribers access to several streaming services through the same bundle offer. This can either be done by the subscriber switching between VODs (such as with EE UK swappable benefits) or getting access to all of them at once (such as with Jio Fiber).
The benefit of a multi-VOD bundle is simplicity for the consumer: a single billing relationship and one user interface through which to access all their entertainment. A subscriber may pause one VOD service but go back to it later, when new content is available. The ability for subscribers to switch between different services gives them more choice and reduces churn for the telco as well.
How can current telco bundles be improved?
More than half of the telco bundles today are fixed duration contracts and half of new bundles launched are with existing VOD partners. When the next contract renewal comes up, telcos have the opportunity to bring multiple VODs together under one bundle, switch to a hard bundling model and turn limited-time contracts into long-term ones.
VODs are here to stay and grow (65% over the next 5 years according to Juniper Research). Enabling a flexible setup for subscribers where the fastest growing and most popular VOD services are available through one telco bundle means telcos can benefit from this growth trend as well.
Fortumo’s Trident Bundling Platform helps make the shift to multi-VOD bundles simple for telcos. By adopting the bundling-as-a-service approach, telcos can focus on the complex part of bundles (commercials) without having to worry about the complexity of rolling these partnerships out. Trident has been used to deploy more than 50 bundling programs across 15+ leading digital content merchants and 30+ mobile operators.
If you want to learn more about how we help telcos and VODs launch, optimize and improve their bundle partnerships, download the white paper below by filling out the contact form or get in touch.