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Most Recommended Video Streaming Companies by NPS®

by Cvetilena Gocheva

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NPS Financial Services / 27 Banking NPS Scores 2022

by Cvetilena Gocheva

Waiting for the next episode of your favorite TV show? A thing of the past. In the golden age of TV & movies, consumers no longer need to patiently wait for the next great flick. Why? Because we’re living in a streamer’s world now. While the media industry is trying to keep up with these new consumption trends, subscription services like Netflix, Amazon Prime Video, Hulu, and HBO have been occupying a sizeable chunk of the market. Today, about 60% of consumers use streaming services on a monthly basis with companies like Netflix and Hulu increasing profits—all the while gathering a wealth of consumer data.

At first glance, many of these media providers seem the same—offering viewers a library of content on demand for a small monthly or yearly subscription cost. What differentiates these companies is the experience and products they offer, each contributing to different levels of customer satisfaction, loyalty, and retention.

Today we’re ranking these popular video streaming companies based on their Net Promoter Score® in order to explore their CX accomplishments and pitfalls. While some companies have customer engagement down to an art form, others have some work to do to achieve successful customer strategy.

1. Netflix – 64

Topping our list is Netflix, the streaming service that’s truly changed the way the world watches television. Its binge-encouraging set up is optimized to collect volumes of data from its users. However, this isn’t just to generate viewer recommendations. Using pattern recognition and analysis, Netflix attains valuable information such as what feature images generate the most views for various audiences, the order movies should appear for a user, and even the optimal wording of a movie or film description. As a result, the platform sees frequent updates as Netflix seeks solutions that resonate with customers.

The Netflix algorithm is designed to make sure customers enjoy what they watch, and it’s working—80% of what is watched on Netflix comes from Netflix recommendations. To achieve this, Netflix conducts countless experimentations with its algorithm, marketing, and content to collect valuable customer feedback and adjust its media content strategy.

This heightened approach to personalization is at the core of Netflix’s engagement with customers. It’s a system that follows good NPS practice, which fuels positive customer experiences and financial success. Netflix’s current standing in the media industry certainly gives this idea some evidence. The company boasts an NPS of 64, 30 points over the industry average. Thanks to its loyal customers, Netflix saves $1 billion a year on customer retention in addition to income from its 130 million paid members as of Q3, 2018.

Of course, while Netflix’s willingness to experiment has been rewarding for its business, it also generates some risk. Take the company’s recent interactive film, Black Mirror: Bandersnatch, where customers are able to engage with the feature and make decisions in the plot line. The release generated many accolades and a whirl of interest, but a group of users were left discontented and ready to quit.

It doesn’t come as a surprise that Netflix is branching out of its spectrum of content. The company already occupies 45% of the households in the US and attaining new customers is getting increasingly pricey. With the threat of peaked subscriptions, Netflix is searching for new ways to keep its place as one of the top video streaming companies. It’s no simple feat. With a competitive market and new entrants threatening to revoke content rights—Disney+ is set to launch in 2019, and will likely take Marvel with it—Netflix has been escalating original content production. The company spent $13 billion on new films and shows in 2018, and started the New Year by increasing subscription costs for new and existing users. Whether this latest move is more likely to alienate viewers or help Netflix with its production costs, remains to be seen.

All in all, Netflix must continue to put customers first as it seeks a new market niche. Whether the big breakthrough will come from interactive media or another innovative approach, the odds are always good for a customer-centric business.

2. Hulu – 21

Our next company on the list, Hulu, is doing fairly well with a Net Promoter Score of 21. The subscription video on demand (SVoD) site reached over 25 million subscribers at the end of 2018, placing it ahead of many cable and satellite companies. Hulu also saw a 45 percent increase in advertising revenue, bringing it to nearly $1.5 billion. However, Hulu lost $531 million in 2016, and an even larger $920 million the following year. This is a worrying trend for investors, who want to know whether or not Hulu is on track to correct its debt with this recent influx of subscribers and ad revenue.

Hulu tries to make the right moves to keep its customers happy. In anticipation of the rapid growth, Hulu teamed up with Twilio to create a customer support contact center that could handle a large number of questions and concerns. The partnership with Twilio provides frontline customer service reps with information about callers, allowing them to personalize service, and provide better experience. Through this, we can see that Hulu is thinking about customers and anticipating their needs. So, what is Hulu missing in customer loyalty?

For one, Hulu’s service doesn’t offer the Netflix-grade level of personalization. The company also hasn’t always provided exemplary customer service. Prior to the introduction of their new call center, Hulu’s focus was mainly occupied by content creation—an endeavor that, coincidently, is also the source of its debt.

To catch up to Netflix on the original series front, Hulu invested $2.5 billion to create its own scripted series with the aim of drawing in new customers. It seems to have finally paid off in 2018, with shows like The Handmaid’s Tale becoming a must-see.

With a strong new customer base, Hulu can begin to strategize for much-needed customer retention. The company’s churn rate of 20+ percent is about twice that of the SVoD average of 11. As Hulu’s recent experience showed, new customers are expensive to acquire and won’t product good ROI if they churn. If Hulu keeps prioritizing subscriber growth over retention, it will likely keep its current NPS (or worsen it), and endure further financial difficulties. By putting existing customers first (growing personalization both in customer service and CX), Hulu will be on the right track towards revenue growth and retention.

3. HBO Now/HBO Go – 15

HBO is the oldest running paid television service in the U.S., so it has an arsenal of experience getting people to pay for its exclusive content. With the success of Game of Thrones, the network could have forced viewers to get cable to keep up with the series. Instead, the company offered HBO Now, giving viewers subscription-based access to HBO’s library and any shows on air. Meanwhile, customers with cable service received access online to the entire HBO library through HBO Go.

The transition to subscription services allowed HBO to stay relevant in a changing market of media consumption. Not only did HBO Now make it harder to justify piracy, it gave younger, cable-averse generations a chance to join the customer base.

It was a great first step, but HBO still falls short with their content diversity. As a result, the service remains one of the least popular among competitors, with 90 percent of its users additionally subscribing to Netflix, and 80 percent to Amazon Prime. With less content available than in other streaming services, HBO Now doesn’t stand on its own, making it the less popular choice.

HBO hasn’t given up fighting in this competitive field and continues to put customers first with great service. When subscribers to HBO Now and HBO Go wanted an autoplay feature, the company promptly delivered. By listening to customer feedback, HBO encourages its existing customer base to stick around. While the company may continue to struggle if doesn’t grow its content collateral, HBO is on the right track with prioritizing retention.

4. Amazon Prime Video – 11

Given the ubiquity of Amazon, it is a bit surprising to see the company at the bottom of this list. However, where Amazon has shown ingenuity in many marketplaces, it’s consistently missed the mark with Amazon Prime Video.

Amazon Prime, like Netflix, uses personalization as part of its customer experience, recommending shows and movies based on what a user just watched. This is a strategy Amazon has been implementing since it was just a web-based book store, and it’s been highly effective.

Unlike Netflix, Amazon Prime’s entire library isn’t covered by the cost of the subscription. Many series and movies, particularly Amazon Prime originals, are available for the base subscription price. However, most of the videos sitting in the Amazon library still have to be rented or bought for an additional cost.

As a result, videos not included in the subscription price are dangled in front of the customer. Whether this is intended to siphon more profit, or is merely a result of faulty CX planning, customers are left quite disgruntled.

One can argue that Amazon Prime isn’t exclusively a media service—subscribers reap the benefits of other services in the package such as free, 2-day shipping and access to Amazon Music. But Amazon Prime Video is marketed as a big perk of the subscription, so its relative lack of free video content makes the company look shaky against the competition.

Like Hulu, Amazon is trying to leap forward in market share, but is hindered by a distinct lack of focus—just what is it creating, and what is the company’s overarching content or growth strategy? Like it’s competition, Amazon is increasing its original content production, but it’s also trying to get into the live television market with an NFL pre-game series. This is an interesting choice at a time when most live television viewers specifically use cable for this purpose, avoiding subscription-based media.

Granted, Hulu also offers a live TV package, but it provides the complete Hulu library with one simple subscription—something that Amazon won’t be doing in the near future.

Amazon is unmatched as an ecommerce site. But to be better positioned in the marketplace as an SVoD, the company needs to reshape Prime Video to be a more attractive benefit in the Prime package. Until then, it will continue to rank below Netflix and Hulu in customer popularity, and in NPS.

Parting Thoughts

Amazon Prime Video, Hulu, HBO and Netflix exist in a fast-changing industry. Competing with each other, new market entrants and traditional cable companies, each media provider is struggling to differentiate in their own way.

As Netflix tries to enter the future with interactive media, it must weigh the customer groups it will be gaining and losing along the way. In contrast, Hulu will benefit by differentiating itself with high-quality customer experience now that the company is attracting hordes of new subscribers. HBO’s main struggle comes with its niche-like content. Despite producing high-quality, gripping TV shows, the company lacks the abundance of content needed to satisfy viewers. And lastly, Amazon, despite offering what seems like unlimited content at first glance, is alienating customers with additional, unexpected costs.

It is difficult to predict which company will ultimately rise to the top in a few years’ time. One thing is clear—a customer-focused strategy is a big component of success not only for attaining new subscribers, but for nourishing existing customer expectations and experiences.

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