Understanding The Relationship Between Annual Plans And Promotions

Annual plans have been successful in other subscription categories at mitigating churn, but have not been heavily used by video streamers. At the end of Q1 2024, Antenna estimated that just 4% of subscriptions across 41 SVOD services were to annual plans.

Video subscribers' hesitancy to commit may be driven partially by the Serial Churner behavior which is rampant in the category. However, pricing likely plays a factor as well. Most video streaming services offer two months free with an annual commitment. For instance, Max’s ad-free plan is $16.99/month or $169.99/year, which is the same as the price for 10 months, and translates to a 17% discount on the monthly price. Looking at other categories, the meditation app, Calm, is $14.99/month or $69.99/year, which translates to a 61% discount (Calm also offers a lifetime membership for $400!). Similarly, the dieting app, Noom, is $70/month or $209/year, a discount of 75%.

And in fact, Antenna finds the uptake of Annual plans in video improves when a deeper discount is offered. Looking at Q1’24 data, 27% of Annual plan Sign-ups came during a price promotion, compared to just 4% of all SVOD Sign-ups coming via a promotion in the same quarter.

A great illustration of this happened in late 2022, when Max held a promotion of its Annual plan around the premiere of House of the Dragons. The promotion reflected a 40% discount from its Monthly plan prices and a 30% discount from its typical Annual plan prices. Share of Sign-ups to Max’s Annual plan increased to 16%, over 5x the 3% benchmark.

Even with the deeper discount, Antenna saw a higher CLTV for Max’s promotional Annual plan subscribers compared to standard price Monthly plan subscribers. The Max Annual plan promotion subscribers had an average 18-month CLTV of $186.71, 52% higher than the 18-month Monthly plan CLTV benchmark of $122.48

This analysis is featured in the latest edition of Antenna’s State of Subscriptions Report. If you’re interested in downloading your own copy, you can sign-up to receive it automatically on our homepage. If you’re already on our distribution list, check your email - we’ve sent out a download link to everyone who has opted-in to receive communication from Antenna. If you’re an existing Antenna client, you have exclusive access to a client-only expanded version of the Q2’24 State of Subscriptions report.

For more detailed information on Antenna’s methodology and definitions of core metrics, please visit http://www.antenna.live/methodology.

* Premium SVOD includes 9 Services: Apple TV+, Discovery+, Disney+, Hulu, Max, Netflix, Paramount+, Peacock, and Starz. Specialty SVOD includes 32 Services: A&E Crime Central*, Acorn TV, ALLBLK*, AMC+*, BBC Select, BET+, BritBox, Cinemax, Crunchyroll*, CuriosityStream*, Doc Club, Docurama, Fox Nation*, Funimation*, Gaia*, Hallmark Movies Now*, History Vault*, Lifetime Movie Club*, MGM+*, Noggin*, PBS Documentaries, PBS KIDS, PBS Living, PBS Masterpiece, PureFlix*, Shudder*, Sundance Now*, Topic, True Royalty, UP Faith & Family*, ViX Premium*, and Zeus Network* (*denotes that Direct distribution is not covered)

Brendan Brady is a Content Strategy Associate at Antenna, a measurement and analytics company providing insight into purchase behavior and subscription metrics across the new media landscape.