ESPN+ The Latest D2C Video Product with an Annual Subscription Discount

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Welcome to Telogical Talk, a weekly series where we analyze a slice of the competitive intelligence data collected by the Telogical research team.

This week, in the wake of ESPN announcing the official launch date of its direct-to-consumer streaming subscription service, ESPN+, we’re talking about how D2C video services have deployed new pricing options for consumers, including savings through annual subscriptions.

Data

The menu of D2C video offerings continues to grow, with monthly prices typically ranging from $3 to $15 per month. Some providers offer discounted pricing tied to annual subscriptions.

The chart below plots the monthly prices of selected D2C video products. Each bar is labeled with the annual subscription price. The more intense the green, the greater the discount with an annual subscription.

Analysis

Unofficial Industry Standard: 2 months free or 17% discount has the appearance of de facto typical annual subscription pricing. Well-known brands like CBS, Starz, Hallmark, Lifetime, and now ESPN all landed on the same pricing strategy, regardless of whether the underlying monthly price was $4, $5, or $10 per month.

Not everyone is on the annual subscription train. Notably, some big hitters do not offer annual subscriptions. HBO, Netflix, and Hulu currently stick with month-to-month pricing.

Amazon Prime Video customers were pushed toward the $99 annual commitment when it raised its monthly price from $10.99 to $12.99. However, within Prime Video, a customer who subscribes to additional channels can only select monthly pricing options-- annual subscription pricing is unavailable for add-on channels.

Keep an eye on annual subscriptions. Streaming devices allow customers to easily start-and-stop services. While most D2C products are currently in launch/growth mode, eventually, these providers may deploy aggressive annual subscriptions to stabilize churn and lock in revenue streams. It's conceivable that today's outliers, like Boomerang, charted above with its 33% (4 months free) annual subscription discount, may be tomorrow's industry standard.

At Telogical, we’re always studying the competitive landscape. If you have a topic you’d like to discuss with us, please reach out. We look forward to working with you.


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