Best practices for turning free users into paid subscribers on OTT in 2024

In the rapidly expanding world of OTT (Over-the-Top) platforms, the users have plethora of options on their table to select which platform they want to subscribe for. With this market scenario, the ability to convert free users into paid subscribers is essential for a long term growth.

With an increasing number of platforms offering a mix of free, freemium, and paid content, competition is fierce among the growing streaming companies all over the world on monetizing their user base. This makes it more challenging for companies to clearly communicate the value of a paid subscription to the end user.

Developing effective strategies to move free users down the conversion funnel is crucial for OTT platforms to thrive in 2024 and beyond. After retention, conversion still holds the second most important challenge for growing streaming companies globally.

Overview of the larger challenge of conversions

Many OTT platforms encounter significant obstacles when trying to convert their free users into paid subscribers. These challenges range from user resistance to paying for the content, to offering an attractive value proposition that differentiates a paid subscription from free access, apart from the main battle of Content (which still is the KING 😎 ).

While free/guest users often sample content to explore the platform, getting them to commit to a paid plan requires targeted efforts and personalized engagement apart from delivering the top notch streaming QoE.

Key challenges in today’s world include:

• Rising competition among streaming platforms offering freemium content;
• A lack of clear communication on the value of paid features;
• Inability to keep users engaged long enough to convert;
• Frequent streaming errors or bad customer experience.

Importance of conversions for business growth

Customer conversions are pivotal for OTT platforms to generate sustainable revenue and build a loyal user base apart from developing customer advocacy. Guest/free users are a great way to expand reach and increase brand awareness, but without converting them into paying subscribers, long-term growth is restricted.

Paid subscriptions ensure more consistent revenue, reduce churn rates, and create opportunities for cross-selling TVOD services. Successful conversions also enable platforms to optimize content offerings and refine the overall user experience, paving the way for future growth funnel.

Understanding the free to paid conversion journey

Now if we try to breakdown the steps of a user journey for any OTT platform, we may break the entire lifecycle into following four stages:

• Discovery
• Activation
• Conversion
• Retention

Out of these four, conversion is the one that every Product Manager is trying hard to improve on, but without understanding the psychology behind a consumer’s mind, it is near to impossible to optimize on conversions.

User Behavior Analysis

To boost free to paid conversion rates, it’s crucial to first understand how free users behave on your platform. Free users tend to explore content cautiously, sticking to familiar genres or shows and rarely engaging with premium features.

They often prefer trial periods, using them to evaluate whether the content library and app experience are worth paying for. These behavioral patterns provide key insights into when and how to promote subscription upgrades.

Analysis typically reveals:

• Free users often engage with familiar content first;
• Users evaluate the value of paid content during trial periods;
• Their subscription decision is influenced by content quality, app performance, and pricing.

Common Drop-Off Points

Identifying where free users drop off during the conversion process can reveal friction points that prevent users from upgrading. Users may leave during onboarding, at the payment stage, or after facing technical issues like slow load times or poor app performance. Addressing these drop-off points is critical to smoothening the user journey and increasing conversions.

During the entire lifecycle of Discovery, Activation, Conversion, & Retention, activation is the most crucial step which influences the entire decision of conversion, and top-notch viewer experience is the key.

Common drop-off points include:

• During the onboarding process;
• When faced with technical issues such as buffering or crashes;
• At the payment or upgrade stage due to unclear benefits or lack of trust.

Importance of User Experience

The user experience (UX) plays a major role in determining whether a free user will become a paying subscriber. A seamless, well-designed platform that delivers fast, buffer-free content and personalized recommendations can keep users engaged and nudge them towards upgrading.

A poor UX, on the other hand, could lead to frustration and cause users to abandon the platform altogether.

UX considerations for boosting conversions:

• Ensure fast load times and smooth navigation;
• Offer personalized recommendations based on user preferences;
• Avoid app crashes or other technical failures;
• Avoid frequent buffering issues, and higher startup failures.

Discover how MediaMelon’s cutting-edge QoE analytics lets you keep an eye on all fatal and non-fatal errors in real time along with AI powered state-of-the-art error mitigation system.

Book a demo with our experts and see MediaMelon live in action customized to your use case.

Key Factors Influencing Conversion Rates for OTTs

When it comes to factors influencing the customer conversion rates, there could be multiple factors. While content quality and relevance are often top of mind, technical performance, personalized user experiences, streaming experiences and strategic pricing play an equally crucial role.

Understanding these factors influencing can help OTT platforms refine their approach, ensuring they are offering value where it matters most to the user. In this section, we will dive into the core elements that shape the success of conversion efforts on OTT platforms.

Content Relevance and Quality

Apart from all tech heavy jargons, Content still holds the number one spot in factors affecting conversion rates for OTT platforms. For majority of the free users, the decision to subscribe is closely tied to the quality and relevance of the content available on the platform.

Offering exclusive, high-quality shows and movies that cater to their specific tastes and preferences increases the likelihood of upgrading. Additionally, content recommendations based on users’ past viewing habits can help expose them to paid content that may lead to a conversion.

Factors that influence conversions:

• High-quality, exclusive content offerings.
• Relevant recommendations based on individual user behavior.
• Providing clear distinctions between free and paid content.

App Performance and Stability

Nothing can turn a potential subscriber away faster than a poor-performing app. Users expect a seamless streaming experience, and frequent crashes, or app errors can leave a lasting negative impression. OTT platforms that invest in robust app performance and stability are more likely to see their free users convert into paying subscribers.

Key performance areas:

• Fast load times and minimal errors;
• Reliability across different devices and platforms;
• User-friendly design with minimal interruptions.

Streaming QoE

While this could be a no-brainer for an OTT platform to provide a top notch Quality of Experience, still most of the growth stage brands fail to deliver on this.

High buffering, delayed startups, and frequent fluctuations in the bitrate ladder, could be few of the metrics that contribute towards a bad QoE.

We at MediaMelon have developed a proprietary metric called ‘Q-Metric’, that’s a score for your past day streaming health out of 5. Our customers have experienced an unprecedented improvement in their Q-Metrics over time.

Pricing Strategies

Effective pricing strategies can be a powerful lever for conversion and could be a possible deal breaker in the viewers’ mind. Freemium models, trial periods, and offering limited-time discounts can encourage free users to test out paid plans without committing upfront. These pricing models help reduce friction by allowing users to experience the benefits of paid content before making a full commitment.

Pricing strategies include:

• Offering trial periods with full access to premium content.
• Providing discount promotions for new subscribers.
• Creating freemium models that upsell premium content.

Personalization

Personalization stands the second most crucial element that influences on a consumers’ decision of conversion. From personalized content recommendations to targeted promotions, platforms that use data-driven strategies to meet user preferences tend to perform better in turning free users into paying ones.

This kind of tailored engagement makes the transition from free to paid feel more organic and rewarding.

Personalization techniques:

• Tailored content recommendations based on viewing habits.
• Personalized promotions and offers.
• Dynamic in-app messaging to promote upgrades.

Seamless Cross-Device Experience

Today’s OTT viewers expect a seamless, consistent experience across all devices—be it mobile, desktop, tablet, or smart TV. Free users are more likely to upgrade if they know they can switch between devices without losing their place in a show or experiencing diminished quality. OTT platforms that ensure a seamless cross-device experience can see higher conversion rates.

Cross-device considerations:

• Allow uninterrupted transitions between devices;
• Maintain consistent video quality across platforms;
• Sync user preferences and watch history seamlessly.

Our MediaMelon SDK combines users’ activity across devices and networks, and let you analyze at macro as well as micro level from a unified dashboard.

MediaMelon’s Approach to Boosting Conversions

Leveraging App Insights

We at MediaMelon have built a dedicated Application Insights module which would allow streaming companies to figure out patterns on user activity, and correlate the business impact (for eg. could be a direct purchase for a TVOD company or could be a subscription for a general OTT) with user actions.

This would help the streaming organization to find out the most followed path that is contributing the most to their hero event (eg. purchase, subscribe, etc). Once this is figured out, optimizing the path is the way forward for doubling down.

Optimizing User Journeys with Data Playground

As mentioned in the last para, once the most followed hero path is finalized, one can easily optimize it for doubling down on the conversions.

Apart from the existing champion path optimization, you can well-optimize the least performing ones by analyzing the user journey and patterns of the most-performing path. Let it be optimizing the CTAs, or a generic user flow for that instance.

Data Playground makes it easier for the product teams to figure out and drill down at an individual user’s session level journey to figure out what’s working and what’s not in this entire optimization journey.

Personalized Content Strategies

Apart from the general journey and path optimization, one of the most critical aspects towards increasing conversions could be personalization.

When it comes to personalized content recommendation engine, most of the growing stage OTTs face a struggle on what params to select from. We at MediaMelon have a built in feature called Content Paths, which gives a sankey representation of how the viewer flow has been in between the assets and series.

Apart from general analytics purposes, companies use our open APIs and integrate this into their recommendation engines, to improve the conversions.

General Strategies for Converting Free Users into Paying Subscribers

Personalized Onboarding Experiences

Personalization the onboarding could lead to a higher customer delight, which in turn reduces the friction towards free to paid conversion rates.

Personalizing the onboarding flow with dynamic recommendations and targeted messaging can also help free users quickly see the value in a paid plan. While personalization is always preferred, growth stage OTTs find it hard building out a custom recommendation engine with limited resources.

Behavioral Nudges and Notifications

Strategic nudges can be the motivate free users need to upgrade. For example, after watching a certain number of free episodes or engaging with a particular piece of content, you can trigger in-app notifications that highlight the benefits of upgrading. These nudges, driven by user behavior, offer timely reminders that help guide users down the conversion funnel.

We at MediaMelon have partnered with OneSignal so that our customers can utilize the behavioral nudges based on the video and content consumption patterns.

Targeted Marketing Campaigns

With a deep understanding of user preferences, OTT platforms can create targeted marketing campaigns designed specifically for free users. Whether through email, push notifications, or in-app messages, targeted campaigns that speak to the interests and behaviors of free users can increase conversion rates.

We help a number of companies with retargeting and audience segmentation based on their watch list and content consumption patterns. This enables the platforms to monetize their first-party data in a privacy compliant manner, owning the entire customer data themselves.

Incentivizing Upgrades

Incentives are a tried-and-tested method for converting free users into a loyal paying ones. Offering exclusive content, discounts on the first payment, or even extended trial periods can give users the extra push they need to subscribe. These strategies reduce the hurdles to conversion process, making the decision to upgrade easier and more enticing.

Key success KPIs for measuring conversions in OTT business

Conversion Rate

As the name suggests, conversion rate is the north-star KPI when it comes to measuring the effectiveness of efforts put up toward driving higher paid subscriptions. This needs to be tracked and worked upon continuously by product and revenue teams.

Engagement Metrics

Engagement levels are an excellent predictor of future conversions as it helps us guage the audience love for the platform. Users who engage more with free content are more likely to subscribe to paid plans, making it crucial to track these metrics.

Churn Rate Among New Subscribers

Retaining users after they’ve converted is just as important as the initial conversion, as it all has an interlinked domino effect. Monitoring churn rates among new subscribers provides insights into whether your paid offerings deliver enough value to keep users engaged.

Conclusion: Building a Sustainable Conversion Strategy

Turning free users into paid subscribers is a forever ongoing work in progress and is a journey, rather than a destination. OTT platforms must prioritize a seamless user experience, deliver relevant content, improve the streaming QoE, and consistently refine their conversion strategies using insights. With the right approach, platforms can build a loyal subscriber base that fuels growth and profitability.

Get on a call with our video experts and see MediaMelon customized for your OTT platform’s requirement in action now!