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Marketing Science Is the Path to Profitability for Subscription Media
Article

Marketing Science Is the Path to Profitability for Subscription Media

Derek Rodenhausen, Giorgo Paizanis, Doug Shapiro and Yazan Aljarrah
Boston Consulting Group, 2023
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While subscription media companies have embraced a “growth at all costs” mindset in the past, those that want to survive amid heavy losses today must take a different approach. Fortunately, subscription media companies can benefit from the precision marketing approaches leveraged by digital natives and best-in-class companies with the right strategy, rigor and focus. Boston Consulting Group research reveals common mistakes subscription media companies are making, while providing insight into how to emulate the successes of those leading the pack.

Summary

Subscription media companies are struggling to keep up with the rapid pace of change in their industry.

Leaders in media and entertainment must optimize to drive profitable growth, harnessing the potential of artificial intelligence (AI) and precision analytics to drive value. For the 10 biggest streaming platforms, average acquisition dipped from a year-over-year growth of 51% in 2020 to single-digit rates in 2023. Research from Boston Consulting Group reveals that the highest performing subscription media companies had the following in common: They successfully identify and retain high-value customers, with 30% lower churn rates than others, and roughly half break even on their customer acquisition costs (CAC) within a year, as they excel when it comes to marketing efficiency.

After interviewing over 100 senior leaders in publishing, gaming, video, and audio, Boston Consulting Group discovered several common challenges. Just under a third of leaders reported struggles with performing incrementality testing, which made it difficult to discern which parts...

About the Authors

Derek Rodenhausen, Giorgo Paizanis, Doug Shapiro, and Yazan Aljarrah are professionals with the Boston Consulting Group.

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