The advance of high-speed networks and affordable data plans hasn’t only whet audience appetites for unlimited anytime, anywhere access to the content they desire. It has created ideal conditions for data-hungry streaming apps to proliferate, displacing traditional broadcast TV, and driving the meteoric growth of on-demand video. The phenomenon is global in scale, but nowhere is the impact as profound as in India, the fastest-growing video streaming market in the world. In India, on-demand entertainment services are forecast to account for more than 74% of mobile data traffic by 2020, up from 47% in 2014.
Streaming viewership is soaring, but it’s Hotstar—part of the Walt Disney entertainment empire and India’s largest premium streaming platform —that is seeing numbers climb into the stratosphere. In June Hotstar set a new global benchmark for live events. It reported a record 18.6 million users simultaneously tuned into the company’s mobile website and app to watch the deciding game of the Indian Premier League (IPL) cricket games. This sort of high-octane content has allowed Hotstar to grow the number of monthly users across app and web to 300 million, up from 150 million the previous year.
Hotstar balances a mix of blockbuster entertainment (including rights to popular movies and shows from ABC, HBO, and Showtime) with a bouquet of content aligned with India’s obsession with Bollywood and demand for local language translations. (Note that India hosts hundreds of dialects and over 20 official languages). As a result of this winning combination, Hotstar dominates India’s on-demand video streaming services market. The latest research from Jana pegs Hotstar’s total market share at 69.7%, compared to Amazon (5%) and Netflix (1.4%).
Using data to differentiate the customer experience
At first glance, it’s remarkable that large global players with deep pockets continue to struggle in the Indian market—despite significant investments to ramp up local content. But look under the hood, and you may be surprised. Hotstar’s success may start with broadcast rights for live premium sports paired with high-quality vernacular content that attracts record numbers of viewers. However, it’s driven by a strategy that harnesses personalization, recommendations, and psychographic segmentation to keep them coming back.
Finding the right balance between acquisition and retention is crucial for a company like Hotstar, which thrives on live events. It pays to spend millions of dollars to acquire audiences at scale—but only if users don’t leave in droves when the event is over. Hotstar turned a potential problem into a massive opportunity by mapping individual user journeys to move audiences across the funnel from freemium viewers to paid subscribers.
How Hotstar moves viewers from fremium to subscription
In an exclusive interview, Mihir Shah, VP of Product & Marketing Growth at Hotstar, distills the company’s data-driven approach into the four fundamentals companies must get right to turn casual users into committed fans.
1. Personalize the entire user experience
It’s important to look beyond demographics to gain a deeper understanding of who your user is, what job your product solves in their lives, and how they use your product, Shah explains. In this scenario, actions are just as important as inactions to develop relevant engagement and re-engagement strategies. How many times has the user opened the app or viewed the content? How long has it been since the last interaction? How quickly or slowly is the user moving through the funnel, and what “nudges” might convince and—ultimately—convert them? Shah says these are critical questions marketers can only answer if they get a firm grasp of behavioral segmentation models aimed at understanding and predicting user attitudes and outcomes. “Once you establish a degree of predictability around how your users behave, the way is clear to progress users through the funnel with the help of content that is packaged and promoted based on a deep understanding of user personas and psychographics,” he says
2. Recommend your content along the customer lifecycle
User acquisition burns money if audiences don’t stick around to explore and consume the breadth of content available on the platform. This can be a major marketing challenge, and why a big part of Shah’s job revolves around “converting the sports fans who come to our platform—about 70 to 80 million daily for live events like IPL—to start watching more of the entertainment we offer. And, ultimately, get them to commit to a subscription.”
Achieving this objective requires the ability to identify and segment users based on digital details, including their browsing and viewing history, content consumption patterns and other preferences. “Based on a collaborative filtering method, we recommend entertainment titles that other sports viewers watch,” Shah says. “If the user is a free user on our platform, we move them through the funnel by recommending content from our Premium library that they are most likely to appreciate—content suggestions based on freemium viewership patterns. The relevant recommendations are then delivered to users off-platform as part of an omnichannel campaign strategy that spans push notifications, social and programmatic.
3. Messaging must be personal and perfectly timed
Keep up the momentum with campaigns that seek to influence user behaviors, not just move metrics. Shah illustrates using the example of users who have streamed live cricket matches. “We know that sending them push notifications based on the actual game event will encourage them to relaunch the app and view the game in progress.” In practice, he says, this means “delivering over 100 million push notifications tailored to the moment and timed perfectly within a very small window of just a few minutes.”
It’s a critical timeline that Shah says Hotstar reaches with the help of CleverTap, a customer lifecycle management and engagement platform that is capable of delivering more than 25 million push notifications a minute/ Shah says it was essential to reach Hotstar’s app install base of over 250 million. Significantly, “event-centric” campaigns appear to resonate most with audiences, boosting engagement and the average watch time per session by 12% and more.
“As we cross-sell entertainment content, let’s say a movie, to our sports viewers, our marketing creatives bring out a connection between the sport and the entertainment content, thus making the content more appealing to a sports fan.” But making the connection is just part of the strategy. Shah stresses it’s also a good idea to pinpoint the days and times of the week that different user segments are the most active and receptive to push notifications. Hotstar used these insights to optimize send times, increasing click-through rates by 3x in the process.
4. Engaging with users in real-time is a game-changer
RFM (Recency, Frequency Monetary) analysis is a behavioral segmentation model that examines user activity to identify how recently and frequently they performed a key action. To make sure the effort marketers invest in this model also drives returns, RFM also looks at the monetary value of the action (such as purchasing an item or, in the case of Hotstar, subscribing to programming). Shah is a huge proponent of RFM, a framework his company has harnessed to bring context to user engagement campaigns and, more importantly, predict churn. In both cases, Hotstar segments users in real-time based on certain actions or inactions they undertake within the app.
Imagine a scenario where users who were watching a particular episode of a series simply leave the app for some reason. “We see that as a trigger and send them a customized push notification encouraging them to come back to finish viewing that particular episode at precisely that moment.” Similarly, users who have seen previous episodes of a series but not the latest one, are sent a contextual push notification as soon as the latest episode is released. The outcome, he adds, is “more conversions and increased content consumption.”
The future is interactive
As Hotstar continues on its impressive growth trajectory, Shah says, the company is ready to take on one more bet: that “the future of all sports streaming will be social.” As he sees it, there’s no reason to limit the flow of content to push or pull. “Why should content consumption be one way?,” he asks. “Why can’t it be immersive and interactive?”
To enable two-way exchange, Hotstar is laying a new layer on top of its platform. Last year it introduced Watch`N`Play, a game that challenges users to guess cricket gameplay and outcomes, as well as social features and streaming using virtual reality (VR) to make the match more immersive. This year Hotstar is going one better, adding “another layer of chat” to the platform, allowing fans to invite their friends from their Facebook account or phone book contacts to the platform.
Effective user acquisition ends in advocacy, and that means meeting and anticipating needs that consumers themselves might not be able to identify. “It’s becoming increasingly clear that customers are hungry for more, even though they don’t know what they are looking for,” Shah explains. It’s up to companies like Hotstar to pave the road for this future, building a platform and adding what he calls “unique, inevitable and incremental experiences” that go beyond just entertaining content.