There is apparently a television program out there called “Game of Thrones” that is quite popular, and I’m told its final episode aired last night. To all of you who wished someone who is not currently sitting on the Iron Throne would be sitting on the Iron Throne, I offer my sympathies.

To HBO, though, I can offer only fingers-crossed hope that the end of its blockbuster series doesn’t lead to a wave of streaming subscribers abandoning ship1 and canceling their subscriptions. And now that that single show (for many) has ended, will they stick around?

A report by the market research firm Minitel last week found that HBO faced a particular threat from customers’ attachment to the service being built around just a single show, not the whole package.

Mintel research shows that among over the top (OTT) streaming users, HBO Now subscribers are nearly twice as likely as all streamers to agree they would cancel a service if a specific show/program was canceled or ended.

Considering the cultural phenomena ‘Game of Thrones’ has become, many consumers have subscribed to HBO’s OTT service in order to get access to the popular show. While obviously a boon to AT&T’s bottom line (HBO’s parent company), those consumers pose the greatest risk to abandon the network once their beloved show is over.

Mintel also notes that HBO Now ranks relatively low on consumers’ to-buy lists: “HBO Now is more likely to be a household’s fourth OTT service they choose, rather than the first OTT service they choose.” That means that, when someone is looking for monthly costs to cut, HBO is more likely to pop to mind than Netflix or Hulu. And:

At $14.99, HBO Now is also one of the costlier streaming services. Competitors could present their service as a money saver as well as a source of new entertainment.

Mintel performed a price sensitivity analysis to determine how much the general public would be willing to spend on their ideal OTT platform, and the optimal price point was $20. This indicates that most consumers will likely only budget out a monthly allowance for two to three services, so if a household is picking a service to cut, HBO Now is just as likely to be on the chopping block as Ned Stark.

This is not a business-of-streaming-epic-medieval-fantasy-dramas site, and I’m pretty sure HBO isn’t thinking about this issue for the first time this morning. They’ll be fine.

But as the news business moves from relying on advertising to relying on direct revenue from readers, it’s a useful reminder that the dynamics of a business driven by digital subscriptions are quite different from what came before. An ad-driven model can swell and ebb with traffic flows; a reader who reads 50 articles a month generates more revenue than one who reads 40 or 30 or 20 or 10, with every gradation in between.

But revenue in a subscription business is binary — it’s either a 1 (“I’m a subscriber!”) or a 0 (“Sorry, gotta pay rent”). And that requires different strategies.

The pros and cons of relying on hits

Think of Spotify or Apple Music. Their paying subscribers, it stands to reason, enjoy listening to music! That enjoyment probably includes hundreds or thousands of songs that came out long ago and aren’t going anywhere. Assuming they find the service useful, they’re unlikely to cancel because of any one album’s presence or absence in the catalog.

But think of Tidal, Jay-Z’s competing music service. Because it costs roughly twice as much as Spotify or Apple for what is mostly the same content, it needs a unique pitch. For many customers that was exclusive Tidal-only content. If you love Beyoncé and her new record is only available on Tidal, well, that’s a pretty good incentive to sign up. But as soon as her record is also available elsewhere, the incentive to renew evaporates quickly. The end result is the ongoing reward of a “cancel tidal” search on Twitter.

I use tidal when Jay has a new album and I cancel the subscription 29 days later

— JeauxVaughn 🤘🏾 (@Joveezyy) May 17, 2019

Let me gon head and cancel my tidal again mane

— Carmela Soprano 🏁💙 (@RapRich_Porter) May 13, 2019

Me forgetting to cancel my tidal free trial for the second month in a row when the only album I got a subscription for is now on Spotify pic.twitter.com/BserVxwVte

— annika papke (@annikapancakes) May 14, 2019

That’s the downside of building a subscription service around a hits-driven editorial strategy: You’re asking people to pay on a different schedule than they’re getting value. Subscriptions aren’t set-it-and-forget-it; customers look at their credit card bills and think about what they can get away with cutting. And that means your $10/month digital newspaper subscription is competing with their $13/month Netflix bill, their $7/month Disney+ bill, their $10/month Apple News+ bill, their $13/month Amazon Prime bill, their $5/month Pocket Premium bill, their $10/month MyFitnessPal Premium bill, their $10/month Planet Fitness bill (they haven’t even been since January), and whatever else they’ve committed to.

And that’s not to mention any other news-related subscriptions they might have. It wasn’t uncommon pre-web for someone to subscribe to five or six magazines — prices were low, issues only arrived so often, and their content was usually well differentiated from what else was available. But today, digital news products are ALWAYS ON and frequently kinda hard to distinguish from one another. (For example, The New Yorker’s print magazine is very well differentiated from other magazines or content. But is its web content as distinctive? It’s very good — but there are lots of other places publishing very good pieces off the news of the day too.) Thus far, subscriptions have been very good to a few omnibus (or omnibus-aspiring) big publishers, most prominently The New York Times and The Washington Post. But convincing people to get that second or third news subscription? It’s very much unclear that will work among all but the most omnivorous news consumers.

That reliance on hits is also a question in the podcast industry, where a number of companies (most prominently Luminary) are trying to build consumption habits around exclusive content that would justify a subscription fee. But as our Nick Quah has pointed out, for Luminary to succeed, it needs to convince customers over and over again forever that its offerings are distinct enough from the vast free podcast world to keep that $7/month coming in. You might sign up because some podcaster you like is doing a short-run Luminary show — but what do you do when that short run runs out?

This isn’t a new situation for the news business to be in. Newspapers have always drawn a mix of committed subscribers and one-time buyers at a newsstand or convenience store. Page 1 had to provide “hits” — in the form of appealing above-the-fold stories — every day in order to draw in the single-copy buyers. The leash was longer with home-delivery subscribers, of course. But when a home-delivery customer got mad about something in the paper and canceled their subscription, the impact was a lot more dramatic than bored single-copy reader spending his quarters on something else. Historically, that made many newspapers deathly afraid of killing that one comic strip or that one underperforming column that might anger a subscriber into cancellation. It made newspapers more conservative, editorially speaking. Remember, subscriptions are binary: 1s and 0s.

Nouvelle cuisine — but also some comfort food

Netflix spends a lot of money on original content — betting that it can push enough exclusive content at you every month that something will connect and keep you engaged.

But it also spends big money on decades-old reruns. It’s spending $100 million to have the Friends catalog for just this year. Why spend that much on a show that anyone interested in it has already seen? Because it’s the perfect kind of comfort-food fallback plan for when your hits-driven strategy isn’t working. “Eh, nothing interesting on Netflix tonight. I guess I’ll just watch ‘The One Where Ross Can’t Flirt’ for the 19th time.” For people attached to the show, “canceling Netflix” becomes “canceling Friends,” and that’s tougher to swallow.

THE ONLY REASON I HAVE AN ACCOUNT WITH NETFLIX IS TO REWATCH FRIENDS. WHY @netflix ARE YOU HURTING US.

— Hayley Kiyoko (@HayleyKiyoko) December 3, 2018

“Netflix” is just a company, but Pam Beesly is MY BEST FRIEND.

If @netflix losses The Office show… I’ll stop my $15 dollar up charge subscription (this is thus the only reason why I still have Netflix). #Netflix #TheOffice

— Russianbasterd🏴‍☠️ (@russianbasterd8) April 24, 2019

Hello it's me with your regularly scheduled reminder that The Office will be on Netflix until 2021 — at least!

— Netflix US (@netflix) April 24, 2019

I think there are a few lessons to be drawn from all this for publishers.

Give people good reasons to stick around, all year round. You can’t publish all your big investigations in December because that’s when Pulitzer entry rules encourage you to. People are making yea-or-nay decisions about you every month, and you need to get enough hits out there to keep the loosely attached end of your subscriber base interested.

Building a habit is more important than anything else. Remember this study out of Medill from February? A massive analysis of the reader behavior on news sites found, surprisingly, that there’s virtually no connection between the number of stories someone reads and their propensity to subscribe. Instead what matters is the frequency with which they return to your site.

A lot of newspapers still believe in saving the good stuff for the Sunday edition — which made plenty of sense in print. But if you’re doing that online, you’re missing out on the chance to engage readers more every day. This is also a good pitch for email newsletters, which can remind readers of your outlet’s value every morning, and podcasts, which can build regular consumption habits.

Do work that has long-term, repeat-consumption value. News publishing, by its nature, tends to be about now. (Or at least “a few hours ago” or “last night.”) That made perfect sense with the punctuation of a daily print schedule. But if you’re trying to build a habit, think about ways you can give readers value every day in ways that aren’t about what-just-happened. What is the information problem you can solve for your readers every morning or every night? News radio figured out the value of traffic and weather decades ago; even if the newscast wasn’t very interesting, you were guaranteed a little bit of utility on the 2s and 8s. The New York Times is trying to do it with a giant database of recipes it wants you to make part of your daily meal planning and crossword puzzles it hopes can be part of your every morning commute. If you can figure out a way to integrate that well into readers’ daily lives, you’ll be able to survive the retirement of your star metro columnist or whatever your “Game of Thrones” is.

Don’t think you can just roast hundreds of thousands of civilians in King’s Landing without consequences. But you already knew that.

1. Are there ships in “Game of Thrones”? if not, insert appropriate dragon-based analogy here. ↩︎