By Nick Chasinov, founder of Teknicks, a growth marketing agency that drives sustainable, defensible growth for streaming entertainment and SaaS products.
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In today’s highly competitive streaming landscape, companies like Netflix, Hulu, Disney+ and Roku are vying for market share and subscriber loyalty. With new streaming services entering the market every year, it’s becoming increasingly important for streaming companies to find new ways to acquire and retain users.
While acquisition is certainly important, I believe it’s ultimately retention and engagement that will determine a streaming company’s success in the long term. And one of the most effective ways to drive retention and engagement is through the formation of user habits.
One of the key benefits of user habits is that they can drive engagement. When a behavior becomes a habit, it requires less effort and decision-making on the part of the user. In fact, research (via the Harvard Business Review) found that about half of our daily actions are repetition-driven. This means that users may not need to be prompted to use a product; if using a company’s product becomes a habit, they may also be less inclined to switch to a competitor. This is particularly important in the streaming market, where there are a plethora of options and it can be easy for users to switch between services.
But user habits could also drive retention if they cause them to remain more engaged with a product over time. This is especially valuable in the streaming market, where churn rates can be high, as Antenna research (via TV Tech) shows. Strong user habits may support companies in reducing churn and increasing customer lifetime value.
One example of a company that has effectively leveraged user habits is Netflix. The company’s recommendation algorithm, which suggests new shows and movies based on a user’s viewing history, seems like a great strategy for forming user habits. By constantly recommending new content that aligns with a user’s interests, companies may be able to keep users engaged and coming back for more.
Another example of leveraging habitual behavior to drive engagement is offering binge-watchable content. By releasing entire seasons of shows at once, streaming platforms can encourage users to watch multiple episodes in a row, which could cause users to form a habit of binging. Strategies like these could lead to increased engagement and retention, as users may be more likely to continue watching and ultimately subscribing long-term.
Leveraging Behavioral Strategiesn addition to these examples, streaming companies can use ethical frameworks such as the “hooked model” and behavioral design to influence user behavior and build habits. The “hooked model,” developed by Nir Eyal, suggests that products should be designed to create an internal trigger, such as an emotional need, that prompts a user to take action. By understanding the triggers, actions and rewards that drive user behavior, companies can create products that are more likely to form habits. Behavioral design, on the other hand, uses psychological principles to influence user behavior. Companies can use both of these frameworks to create products that are more engaging and habit-forming.
Making Use Of Data And Analytics
Another important consideration is the use of data and analytics. By understanding how users interact with a product, companies can identify patterns of behavior and make changes to the product or marketing strategy to encourage the formation of habits. This could include adjusting the placement of certain features, testing different onboarding flows or experimenting with different pricing models.
Optimizing The User Experience
But perhaps most importantly, companies should focus on creating exceptional user experiences. When a user has a positive experience with a product, they may form a habit of using it and stay engaged over time. This means investing in high-quality content, easy navigation and personalized recommendations. It also means being responsive to user feedback and making changes as needed.
It’s important to note, however, that while building habits can be an effective way to drive engagement and retention, companies should also be mindful of the ethical implications of influencing user behavior. Streaming companies should strive to build habits that are aligned with the best interests of their users rather than simply exploiting them for financial gain.
In conclusion, forming user habits could be a key step toward winning the streaming wars. By creating products that are engaging, habit-forming and aligned with the best interests of their users, streaming companies can support their retention efforts. As more streaming services enter the market, it’s crucial for companies to find new ways to differentiate themselves. I believe building user habits will be a key driver of their success.
