How Cleeng is keeping streaming subscription churn in check

Subscription streaming services have brought a lot to the table for consumers to like – namely, on-demand access to an array of movies and TV series, and a way to access that content at home and on the go.

Additionally, the vast majority of subscription streaming services don't lock consumers into long-term contracts. Instead, users can come and go as they please each month, subscribing when a new series is available and then departing when it's over.

About that last part: while it hands a lot of control to the consumer, it also represents a major challenge for the streaming services, particularly those focused on seasonal sports fare. How can they not only obtain subscribers but also retain them? And how do they manage and mitigate voluntary churn (when the customer decides to cancel) and involuntary churn (driven in part by non-payment due to things like a lapsed credit card)?

iTunes blazes the path

The churn challenge in the streaming world is front and center for Cleeng, a 14-year-old company whose sole focus is subscriber retention. Gilles Domartini, Cleeng's founder and CEO, has roots tracing back to Apple and the early days of iTunes.

"What we saw is that iTunes really changed how people were consuming digital content," Domartini explains in this podcast. "In the early days of iTunes, [the focus was] mostly music, but fairly quickly it evolved into gaming and then the App Store and, and many other dimensions."

However, e-commerce platforms were not necessarily designed well for the sale of digital goods, beyond fields for addresses and zip codes and other basic elements for the checkout process, he adds.

The idea behind Cleeng, Domartini says, was to replicate some of the "key functionalities" of iTunes as a white label platform but apply more focus on the subscription models that were becoming more prevalent amid the growing popularity of services such as Netflix and Spotify.

That focus has led Cleeng to develop four main components focused on helping streaming services keep churn in check, including a baseline subscriber management system capable of developing a wide range of packages, including seasonal, one-off pay-per-view and promotional capabilities.

Cleeng also has modules focused on customer care (including an AI-based chatbot), the handling of complexities such as taxes, and ChurnIQ, a data lake comprised of information related to logins, payments and customer entitlements that can provide helpful insights on ways to mitigate customer churn.

The sports streaming challenge

Cleeng has seen some recent success in sports-focused streaming services, including agreements supporting services such as Volleyball World, Big 10 Network, The Tennis Channel and the National Football League's NFL+ service. And the sports streaming trend is only getting bigger as services such as Netflix, Amazon Prime Video, Apple TV and YouTube continue to add live sports to their content menus.

Retention in the sports streaming world and being able to manage the season are both critical, Domartini says, noting that offering season passes and variable pricing before and during seasons have become important ways to manage churn.

"We've been really investing in many of these fairly unique functionalities, and [giving] the ability for the broadcasters to pick and choose the rights and to test various business models," he explains. Big 10 Networks, for example, has teamed with Cleeng to add a pay-per-view capability for sports such as wrestling.

"I think sport may be the most challenging [subscription service] to operate because of these non-linear curves that you have in terms of traffic," Domartini says.

Churn reduction metrics vary by service and the tactics and strategies they employ. But Domartini estimates that involuntary, payment-related churn accounts for somewhere in the range of 30% to 60% of subscribers who leave. Offering grace periods and providing effective ways to deliver chargebacks and refunds are also effective ways to reduce involuntary churn, he says.

Beyond video

Cleeng is currently laser-focused on the video subscription market. However, the company is also thinking about other models, such as subscription-advertising hybrids, as well as other markets, including fitness services and gaming, that can take advantage of its platform.

"As the market continues to consolidate, we feel there might be an interest to tap more into this new market segments," Domartini says.

Here's a snapshot of our conversation (click the closed captioning button in the player for a lightly edited transcript):