Increasing consumer value perceptions crucial for streaming services

consumer value perceptions
AMC's A-List movie subscription service has reach 860,000 subscribers in its first year

One of the biggest casualties of the “Rise of Streaming” (aside from physical media like DVDs being put on life support) has been declining consumer value perceptions of going to the movies. Movie attendance hit a 25-year-low in 2017, with just 1.24 billion tickets sold, down nearly 6% Y/Y. And, even 2018’s “rebound year” to 1.3 million tickets sold didn’t reverse a continuing slide.

Theater owners – aside from dropping more Alka Seltzer – haven’t really made enough changes to draw Millennials back into seats. But, there have been attempts made in a hopes of at least pausing audience migration to online services like Netflix and Amazon – and to hold off new services set to launch like Disney Plus and Apple Plus.

How’s that going?

Well, one effort to reset the apple cart – MoviePass – announced earlier this month that it was shutting down for maintenance for several weeks. That followed on the heels of problems that, according to some reports, cost it most of its subscribers.

This spring, Sinemia, the five-year-old start-up that specialized in discount movie-subscription plans, also pulled the plug for its US service.

Like shortening distribution windows, making changes in the theater industry and changing consumer value perceptions can be, to put it mildly, challenging.

Can A-List change consumer value perceptions for AMC?

That hasn’t stopped the US’s largest movie theater chain, AMC, from deploying its own alternative offering. For $20/mo., AMC Stubs A-List users can watch three movie per week at any AMC theater, including IMAX and 3D offerings.

In June, after just a year in the market, the company said it had reached 860,000 subscribers, 72% more than the 500,000 it expected.

In addition to being able to attend multiple movies a week for $20 a month, subscribers can use their mobile devices to pick seats and showtimes, something that appeals to younger consumers.

“The new generations are used to paying for things à la carte every month,” Jeff Bock, a senior box office analyst with Exhibitor Relations, told The New York Post. “Movies should be no different.”

And, while subscriber usage varies on any streaming service, especially with the ebb and flow of new releases to binge on, A-List subscribers are likely to use their service at varying levels, too.

The question, of course, is whether A-List will be able to change that eroding consumer value perceptions moving forward, especially during periods where few new movies are released. That’s something the bigger streaming services, especially, don’t struggle as much with. Those services have a near-constant flow of new content as they’re not only releasing and aggregating movies, but multiple new TV episodes on a monthly basis, too.

The bottom line

The key here isn’t that AMC is offering an alternative to Netflix or Amazon or any others. What’s important is the perceived value AMC’s A-List created for the consumer: Nearly unlimited movies for $20 a month.

And, while more cinema chains are offering better food, recliners and tickets online, A-List users also get a break on the ticket price. And, they’re still likely to spend at the concession stand – more freely because their immediate out-of-pocket expense is smaller.

That increase in consumer value perceptions is equally as important for streaming services, whether they’re providing subscription video on-demand, an ad-supported video on-demand, or a service that offers live content, like sports or entertainment.

The best way to improve perception is to provide a seamless experience with an intelligent user interface, a content discovery tool that streamlines the user experience and a constant stream of fresh content.

Connecting digitally also helps AMC know its customers better. It provides insights to customer behavior, likes, dislikes, and the day of the week they’re most likely to show up. That’s insightful data AMC can convert to actions.

Streaming services need to do the same thing. Use the data you collect, from the sign-up process through the viewing habits your customers exhibit as they graze your platform or consume your content, to better reach out to them with content release calendars and related content they might enjoy. Use it to develop actionable business insights to move your business forward.

While consumers may be comfortable with a lean-back experience, content distributors can’t be.

Stay tuned.

Jim O’Neill is Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn