Mediavision: 1 million households subscribe to an audiobook service – but customer turnover is challenging
9 September 2022
During the past twelve months, until the second quarter of 2022, Mediavision has noted a strong growth in household penetration for audiobook services. But content supply is similar between services, turning customers into bargain hunters. This results in high customer turnover.
Today, just over 1 million households subscribe to an audiobook service. One year ago, this figure was significantly lower, approx. 800’ households. Growth over the past year amounts to 29 percent, which is considerably higher than for both video services and other audio services, e.g., music. However, no growth is noted when comparing with the first quarter of 2022 – meaning that the record-level of household penetration from Q1 2022 remains stable.
The audiobook market in Sweden is also characterized by high customer turnover, in technical terms referred to as “churn”. This means that many customers either switch between services or churn/return to the same service. For media companies that offer subscriptions, it is important to keep “churn” under control, as it is expensive to acquire new customers. Regarding the audiobook services, it appears as though many customers have cancelled or changed their subscriptions during the past twelve months. Since the various audiobook services provide similar content offerings, bait-and-switch pricing and promotions become important means of competition.
Loyal: Households which have not terminated an audiobook subscription during the past 12 months. Switchers: Households which have terminated an audiobook subscription during the past 12 months but signed up for a new subscription either with the same provider or a competitor.
During the past twelve months, nearly 70 percent of the audiobook households have cancelled a subscription and thereafter acquired a new one, either with at the same provider or a competitor. The churn rate is almost twice as high as the churn rate of TV streaming services (SVOD). In other words, audiobook customers are not very loyal.
– It is of course very positive for the audiobook industry that so many people subscribe to a service today. But the overlap in content offerings is challenging for the actors, says Fredrik Liljeqvist, senior analyst at Mediavision. Price drives competition, which in turn leads to high churn. Reducing customer turnover is likely one of the most important issues for the audiobook industry.
Mediavision is a Nordic independent analysis and consultancy firm, focused on analysis and strategy within traditional and digital media. 3,000 respondents between the ages 15 to 74 are surveyed each month in Sweden.
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