Payments can be the answer says Aaron Gale, vice president of sales & account management, video games, at Paysafe

How subscription services can improve customer experience

Consumers are changing the way they spend their disposable income, cutting back in many areas as budgets tighten. But this doesn’t seem to have impacted subscription services – in particular entertainment streaming. In fact, according to research, the global video streaming market size is expected to reach $416.84bn by 2030.

But as new challenges emerge, from growing competition to broader economic disruption and more, will consumers continue to spend their hard-earned money on subscription services? And how highly are these services valued?

Finally, what are the payment trends that subscription services and entertainment streaming companies should be aware of, and how can the checkout be used to deliver an experience that helps them stand out from the crowd?

What subscription services are consumers paying for?

First, it’s important to identify the types of subscription and streaming services consumers are most passionate about.

While there are different types of subscription service, it’s no surprise that entertainment streaming reigns supreme.

Our latest report found that, when asked what types of subscription services consumers are signed up to, film and TV streaming services (57%) and music streaming services (38%) were the most popular choices, while 18% opt for video games. Only 17% of consumers say they don’t have any current subscriptions.

In addition, previous research, found that streaming services are the second top spending category (25%) for consumers, after eating out and takeaways (27%).

While this popularity is clearly a good thing for subscription services, and especially streaming platforms, the market is evolving.

The evolving streaming market

Not so long ago, a handful of industry giants, like Netflix and Amazon Prime, stood tall above all challengers.

With few options to choose from, consumer streaming spending was relatively straightforward. But in recent years, the market has changed drastically.

The number of services has exploded, with seemingly every production company offering their own platform, including Disney+ and Paramount+. In addition, more niche offerings like the horror-focused Shudder continue to spread consumer spending.

And increased competition isn’t the only change to the streaming and subscription market. While film and TV have traditionally been the foundation for entertainment companies’ streaming platforms, gaming has grown in prevalence.

Players can now remotely access hardware on a service’s servers, meaning they can instantly access games on their PCs, consoles, or smart devices. The potential of gaming for entertainment companies with streaming services is significant: Netflix is now looking to the medium as its next platform for growth.

How are consumers paying for subscription services? 

The pressure is now on for streaming services to differentiate their offerings – both through content, and the experiences they offer. Payments can play a key role in this. But how are consumers paying for their services?

When asked how they pay or manage their entertainment streaming services, only 20% of consumers who have subscriptions regularly review and turn them on and off, based on current needs.

Meanwhile, 9% of consumers often sign up for promotions and consider cancelling once the price rises, and 4% only use freemium (where basic models are free but more advanced offerings are paid for) subscriptions. Subscription services, regardless of pricing, seem likely to remain a key part of consumers’ discretionary spending.

So how can entertainment companies provide the best payment experience possible, giving consumers the journey they want, to access the content they love as quickly and efficiently as possible?

Payment experiences are changing – and so are consumer expectations

Subscription businesses and entertainment companies with streaming platforms must offer a payment experience that delivers speed, security, and convenience in equal measure.

Take video game payments, for example. Players have increasingly high expectations of their purchasing experience when playing online games – whether that’s paying for subscriptions or making in-game purchases for additional content.

We have found that security remains a priority – 76% of respondents who make online gaming purchases think it’s important for in-game payment methods to respect their privacy. But privacy must also be accompanied by a swift, friction-free experience.

And even if a service isn’t catering to the growing video game market, payments play a crucial role in making it easier than ever for consumers to begin, manage, or renew their subscriptions.

Here’s how local payment methods (LPMs) can give consumers the flexibility, security, and seamless experience they expect from a subscription service.

Better subscription payments

Consumers are not only seeking choice from their subscription services, but their payment methods. More and more consumers around the world are turning to LPMs, moving away from traditional methods like credit and debit cards to embrace the benefits of digital wallets, eCash and more.

Among these benefits is heightened security: neither of these LPMs require consumers to share sensitive financial details, tackling privacy concerns consumers may have when asked to enter their data.

For gamers, digital wallets are proving increasingly popular – and we found that 63% of respondents who make online gaming purchases think digital wallets are the most convenient way to pay.

eCash, which allows consumers to pay with cash online, using either prepaid or postpaid payment methods – empowers subscription services to reach more customers around the world. Now, they can reach unbanked or underbanked consumers who may want to access their services, but previously didn’t have the digital presence to do so.

In addition, some platforms offer one-click recurring payments, using eCash – allowing consumers to pay for subscriptions with cash, at the touch of a button, without ever leaving the checkout. The online payment experience has never been easier for cash users.

The future for subscription and streaming services is bright. But it’s never been more important to deliver the best experience possible to consumers who are spoilt for choice by an increasingly crowded marketplace.

With a checkout that offers a variety of secure and seamless payment methods, subscription services and entertainment companies with streaming platforms can deliver an exceptional experience and flourish as a result.

Image: Paysafe

Guest Editorial
This article was produced specially for Fintech Intel by an expert guest contributor.