Are Branded Partnerships Fostering SVOD Customer Retention?

  • Leah Zitter
  • December 10, 2019

Streaming services partner with well-known names to differentiate themselves and promote their biggest releases for original content. That’s particularly important in the subscription video on demand (SVoD) world,  116 platforms and growing, and where SVoDs need to forge identities to thrive. 

For brands, it’s an opportunity to break into new markets and add value to their products/services. Spotifyś top playlist, for example, has more than 8.3 million followers, so brands that partner with Spotify have millions of potential followers. In fact, Spotify reports that 74 percent of streamers are more likely to remain loyal to their partnering brands; 61 percent of streamers are more likely to recommend these brands; while streamers are twice as likely to pay more for such brands – likely because they associate it with Spotify. 

Successful co-branding partnerships

Spotify and Starbucks

In 2015, Starbucks partnered with Spotfy to provide its 7,000 U.S. company-owned stores with a “First-of-Its-Kind Music Ecosystem.” Starbucks employees received Spotify Premium subscriptions so that employees could stream music throughout the day in the store.  Both Starbucks members and Spotify users earn Points for subscribing to Spotify premium. 

Spotify and Uber

In November 2014, Spotify hooked up with Uberso riders could pipe their favorite tracks through the car’s speakers. The partnership worked on the premise that riders could control their ride experience while listening to their favorite tunes. 

Other successful Spotify partnerships included AT&T, Bravo TV and speaker manufacturer Sonos Inc. 

Pandora learned from Spotify when it teamed up with both Toyota and Mazda, releasing playlists for their latest car models. Last year, Pandora also gave T-Mobile consumers a free one-year subscription to Pandora Plus.

Marketing

Brands also hook up with streaming platforms to advertise their services.

Examples:

Traits of Successful Co-Branding Partnerships

Successful SVOD partnerships work because each benefits the other and heightens the otherś brand. So Spotify, for instance, heightens Starbucks ́ visuals of the young, tech-savvy student who listens to music while chugging coffee. 

“Hearing your favorite song puts you in a good mood, and if you can relate that passion to your brand, it’s a win,” explained Ben Hordell of digital advertising agency DXagency.

In other cases, marketers use music to encourage consumers to stick around a bit longer. ASOS and Munchery, for example, curated Google playlists, where ASOS used that music for its summer gatherings and fun events, while Munchery played Google playlists for popular meals and recipes leaving fans literally hungry for more.

“Brands,” Hordell told Retail Dive,”should look for partnerships that will enhance their customer’s experience, not confuse them.”

Co-Promotional Merger Fail: Netflix and Goop

In 2018, Netflix partnered with “spiritual wellness” brand Goop, leading critics to warn that Netflix profits from questionable enterprises.  Critics pointed to a Netflix history with pseudo-scientific docuseries, such as Afflicted, and by multiple warnings from the American Council on Science and Health that Netflix promotes junk science programming. Netflix would argue it’s only going where the money is, but observers say such actions and partnerships undermine and dilute Netflix’s branding.

In short, unsuccessful partnerships occur where brands dilute the integrity and/ or message of the company’s brand, and where brand equity suffers.

Bottom line

Although metrics of such co-branding partnerships tell an incomplete story on ROI, studies show streamers typically favor brands that enhance their overall experience and are more likely to reward such brands with their loyalty and endorsements.

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About Leah Zitter

Dr. Leah Zitter has a Ph.D. in Psychology Research with a focus on Behavioral Neuroscience and over a decade of experience as an analyst, covering emerging technology, innovation, and media. She trained as an investigative journalist at the Center for Near East Policy Research, is a researcher at heart and enjoys exploring technology’s impact on culture and society.