Bolder Thinking Blog

New streaming services heading to your mailbox

September 18th, 2019 | Emily Groch

New streaming video on demand (SVOD) service Disney+ has begun presales using direct mail to promote a special offer on the service to Disney Visa cardmembers. Disney has a history of utilizing mail in unique and engaging ways (if you’ve ever planned a trip to one of its parks, you know this). As such, it’s not surprising that direct mail is part of the Disney+ marketing mix, even as most other streaming providers ignore the channel. We expect that competitors are watching, however. And over the coming six-to-12 months, we predict that direct mail will become an important component of the SVOD marketing mix, as the marketplace grows more crowded with significant new entrants.

When it comes to SVODs, direct mail rarely emerges in the marketing strategy. Direct mail may be cost prohibitive as a pure acquisition tactic for companies like Hulu or Netflix, whose services start at $6/month and $9/month, respectively. But the economics of direct mail make better sense when a brand uses the channel to communicate with consumers that already have a relationship with the brand. A brand has a good chance of getting noticed in the mailbox by an existing customer, particularly since the physical mailbox isn’t as clogged as the email inbox. Today’s SVODs are mostly pure plays, so there isn’t an opportunity for cross-sell via direct mail or any other channel. The new players entering the space (Disney, Apple, AT&T, NBCU) have other products and existing customers they can reach with promotions for their new streaming services, and in these cases, direct mail targeting makes perfect sense. 

Disney+ mailer

With its recent mailer, Disney taps its existing fan base to drive multi-year subscribership for Disney+. The mailer features two offers exclusive to Disney Visa cardmembers: a two-year Disney+ subscription for $119.99 or a three-year subscription for $169.99. This is the second multi-year prepay offer we’ve seen Disney offer to consumers with an existing relationship with the brand. 

Amazon has also utilized mail to promote Prime Video to its Prime subscribers. Prime subscribers who have not taken advantage of Amazon Prime Video receive letters encouraging them to do so. This effort is not a cross-sell strategy, but rather an effort to encourage customers to engage more deeply with the Amazon ecosystem (making it less likely they will leave). Amazon has used direct mail for this purpose for more than three years, which suggests the approach has been successful.

Unlike SVODs, streaming live TV providers (which are typically priced substantially higher than an SVOD) have utilized direct mail for acquisition. When Sling TV first launched, for example, it followed a similar marketing playbook as parent company Dish, which meant that direct mail was an integral part of the channel mix. Over time, Sling TV has moved out of the mailbox. Meanwhile, a newer competitor in the streaming live TV sector started sending mail in 2019 – Philo. Philo sends mail to encourage consumers to sign up for its free trials. Philo first started sending its letters in January, but significantly increased mail volumes in July, when it sent an estimated 1.3 million mailers.

Although the cost per impressions are higher for mail than for digital channels, there’s no denying the channel’s power, particularly when trying to stand out from the noise of digital marketing. First, it’s more likely that a mailer will be seen than a digital ad. Mintel research on digital advertising finds that a third of consumers use ad-blocking software. Meanwhile, many consumers are sorting through their physical mail every day. Plus, according to Mintel research on marketing to the iGeneration, more four in five Gen Z consumers love getting mail. Nearly the same number of Millennial moms in Canada agree that they love getting stuff in the mail, such as letters and catalogs, according to Mintel research on marketing to Canadian Millennials.

We expect that direct mail will become more important to streaming providers in the coming months, showing up as a regular piece of the marketing mix, mainly for cross-selling communications. Additionally, we expect savvy lifestyle brands like Disney to use direct mail to surprise and delight Disney+ subscribers to reinforce loyalty – and other streaming providers may follow suit. 

For more on how SVODs will focus on loyalty in 2020, be sure to check out our 2020 Telecom Trends, launching in October!

Emily Groch

Emily Groch

Emily Groch is Comperemedia’s Director of Insights, Telecommunications, providing omni-channel marketing analysis and competitive insights to telecom providers.