AI is playing an increasingly central role in broadcasters’ direct-to-consumer (D2C) strategies. This shift was evident at IBC 2024, where discussions underscored AI’s evolution from a buzzword to an essential driver of innovation in media and entertainment. According to a recent Google Cloud study, nearly two-thirds of senior media and entertainment executives now see AI as a critical driver of future revenue growth. Yet, the question remains: How exactly does AI support revenue generation for broadcasters?
The Role of AI in Tackling Churn to Protect Revenue
Churn remains one of the most significant threats to revenue growth in subscription-based models. Research conducted by Omdia uncovered that average industry churn rates range from 11% to 14% per month. This implies that many streaming platforms are churning nearly half of their subscriber base every six months. With three-quarters of industry leaders predicting churn will hold steady or even increase, the challenge at hand is evident.
AI steps in here by equipping broadcasters with the tools to proactively address churn. By identifying at-risk subscribers and enabling timely, targeted interventions, AI becomes a powerful ally in retaining customers and protecting revenue. Let’s explore how this works in practice.
Four Key AI Applications to Reduce Churn and Drive Revenue Growth
1. Proactively identifying and retaining at-risk subscribers: AI’s predictive analytics capabilities are revolutionizing how broadcasters identify subscribers at risk of churning. By using machine learning models to analyze patterns in viewing habits, customer interactions, and tenure, AI systems can highlight subscribers likely to cancel—and even pinpoint underlying reasons. This data can inspire proactive engagement strategies, offering an opportunity to retain subscribers before they leave.
Once an at-risk subscriber is identified, AI-driven tools can help broadcasters tailor interventions to different segments based on those subscribers’ unique profiles. This may include special offers, relevant content recommendations or engagement prompts. With this approach, broadcasters can get better positioned to retain high-value subscribers, thereby protecting at-risk revenue.
2. Delivering personalized, targeted responses to drive loyalty: Timely, relevant outreach is critical for effective retention. AI-driven campaigns empower broadcasters to connect with audiences through personalized messaging, offers, and reminders based on a subscriber’s history and engagement. This precise targeting is essential for building loyalty in today’s hypercompetitive market.
By identifying at-risk subscribers and enabling timely, targeted interventions, AI becomes a powerful ally in retaining customers and protecting revenue.”
AI-powered content recommendations based on individual viewing histories, for example, can help deepen engagement and build excitement for future offerings. In fact, nearly 50% of streamers report appreciating AI-curated recommendations, according to a Media Play News survey, underscoring how valuable these personalized suggestions are for retention.
Beyond content, AI can support dynamic, flexible pricing strategies. By analyzing regional preferences, user activity, or behavioral data, AI can enable broadcasters to offer personalized pricing options, such as discounts, upgrades, or subscription adjustments. These models can allow broadcasters to meet subscribers’ needs more precisely, reducing the likelihood of cancellation.
Another application: AI-driven in-app notifications can further enhance engagement by nudging subscribers to explore new content or remind them of upcoming events they may enjoy. Predictive analytics can also anticipate payment behaviors, allowing for timely payment reminders or alternative options to reduce involuntary churn. These tailored interactions can help build a subscriber experience that meets users where they are and strengthens retention efforts.
3. Enhancing marketing performance with data-driven insights: AI’s capabilities aren’t just restricted to predicting churn and enabling action; It can also enhance the overall effectiveness of marketing efforts. By analyzing subscriber responses in real time, AI can allow broadcasters to continuously refine their retention strategies.
For instance, AI can identify which types of campaigns perform best, what drives engagement and which subscriber segments are at highest risk. This data can equip broadcasters to adjust tactics based on proven insights rather than on guesswork. Over time, these adaptations can make marketing efforts more effective and efficient, directly impacting subscriber loyalty and revenue.
Additionally, AI can even simplify the process of gathering insights. Using AI tools, broadcasters can quickly obtain answers to key questions about subscriber behavior, churn drivers, and revenue trends from vast datasets without extensive manual analysis. This can enable faster, data-driven decision-making and reduce the dependency on large analytics teams, streamlining operations and costs.
4. Delivering an outstanding subscriber experience to combat churn: Customer experience is a critical factor in retaining subscribers. A seamless streaming experience directly correlates with satisfaction and, ultimately, subscriber loyalty. AI has a pivotal role here as well by continuously monitoring and optimizing the quality of experience (QoE). AI tools can detect network issues or buffering risks early, preventing disruptions that can lead to subscriber dissatisfaction.
AI can also strengthen customer support by addressing common inefficiencies associated with traditional support mechanisms, such as long response times and impersonal interactions. AI-powered chatbots, for example, can handle a wide range of subscriber queries, improving first-contact resolution rates and freeing human agents to focus on more complex issues.
Over time, these chatbots learn from interactions, enhancing their effectiveness and personalization capabilities. In cases requiring human intervention, AI can support agents with data-driven insights, enabling them to provide faster, more personalized assistance. This combination of automation and intelligent support can enhance the subscriber experience, reduce frustration, and contribute to lower churn rates.
Bottom Line: Now Is the Time To Invest in AI for Sustained Growth
As we look ahead, AI has transitioned from a “nice-to-have” to a business imperative in the direct-to-consumer streaming landscape. The competitive environment demands solutions that not only attract new subscribers but also retain existing ones. By leveraging AI, broadcasters can take meaningful steps to mitigate churn, optimize marketing efforts, and elevate the subscriber experience. AI offers a clear path to safeguarding and growing revenue through strategic, data-driven approaches to customer engagement, retention, and satisfaction. Truly, the time to act is now.
