Marketers of subscription services including those themed around streaming video and music are cutting back on once reliable direct acquisition strategies, including display and social media advertising, for customer growth and are turning to indirect marketing mechanisms like bundling.
That’s the conclusion of a new research report from Bango, which of course, specializes in making bundling solutions for clients including Verizon myPlan & myHome. Self-interests accounted for, Bango’s survey of 205 “subscription industry leaders” across the U.S. and UK offers some interesting conclusions. Respondents included executives for major subscription video and music streaming services, but also broader services span including online food-delivery platforms. Responder job titles included CEOs, CMOs, CROs, VPs, directors,
and managing partners.
For starters, direct acquisition costs are rising, Bango said, noting that Netflix alone spent $1.7 billion in 2024 on pure advertising. Forty-eight percent of survey participants said direct acquisition is yielding diminishing returns, and 88% said they expect direct acquisition costs to rise this year. Eighty percent of respondents indicated they’re cutting back on at least one direct acquisition channel.
Drilling down into specifics, 33% of execs polled said they’re cutting back on search ads, with display and social ads, influencer marketing and in-app advertising also taking haircuts. Beyond rising advertising costs, privacy restrictions, subscriber fatigue and crowded markets are also diluting the effectiveness of direct acquisition, according to Cambridge-based Bango.
“These direct channels aren’t being jettisoned entirely,” Bango said in its report, titled “Gravity Shift: Subscribers, Bundles, and the Acquisition Black Hole.” But subscription providers are on the hunt for new, more reliable (and more cost-effective) ways to drive growth and secure their futures.”
Meanwhile, 82% of the execs surveyed said they plan to increase investment into indirect channels — such as a “super-bundled” telco offering … like Verizon myPlan and myHome! (Hey, doesn’t make the research useless.) Seventy-seven percent said they’re prioritizing indirect acquisition channels this year. Nine out of 10 subscription leaders said they’re either already using bundles for acquisition or plan to adopt them in 2025.
Beyond bundling, 57% of subscription company decision-makers said they’re looking for partnerships with influencers, podcasts and various communities; 55% said they’re looking into points-based loyalty partnerships; also, 55% said they’re looking to partner up with makers of platforms and devices, including TV manufacturers; and 48% said they’re looking at “employee scheme” partnerships.”
“Across the industry, acquisition strategies are evolving,” Bango said in its report. “What we are increasingly calling the ‘bundle economy’ is seeing subscription providers move from one-to-one targeting to one-to-many partnerships. From isolated spending to ecosystem thinking. From standalone efforts to more collaborative, cross- industry partnerships.”