How to Sell Video

How to Price Your Subscription Video Network

by Lanna Apisukh · August 26, 2016 · Comments

One of the first questions we get from video sellers preparing to go to market is, “How should I price my subscription?” or even “What is my video content worth?” Like any successful business, understanding the value of your product is fundamental. We have hundreds of VHX sellers running their own subscription video services, so we’ve collected the data on what works and what doesn’t. Here’s some advice on how to price your SVOD network, along with some smart practices for your pricing strategy.

Where do I start with pricing?

A good way to begin is basic research. Check out the price of subscription video services similar to yours, and think about your audience’s willingness to pay. This can be done by studying the market and asking your audience through surveys and direct contact.

On VHX, we’ve seen monthly subscription prices range from $1.99 to $50. The differences depend on the content type, quality, and frequency of release. Niche or instructional content that cannot be found on another service is more valuable, as exemplified by AKT on Demand successfully charging $49.99/month. Award-winning content with high production values (like MHz Choice’s roster of international crime dramas) gives an audience a reason to believe the money they spend will be well worth it. And frequently releasing videos shows additional value to your viewers, since they will be able to expect something new to watch on a regular basis.

How do I know if I’m overcharging or selling it for too little?

The best way to know what your audience is willing to pay is simple. Ask! Use survey tools like Typeform or SurveyMonkey to inform potential viewers about your product and gauge their interest. You can also allow customers to set their own price with Pay What You Want and see what the average, median, and variance of prices are. This will give you a good idea of people’s sensitivity to the increase or decrease in price.

You’ll know when the price is right when you see an uptick in subscribers and positive feedback from customers and casual viewers. A good clue: when customers begin to share your video channel on social media, or become an advocate for your service online or on your site forums.

What are some pricing tactics I need to know in order to grow my video business?

The secret to finding the perfect price is to start low and go up as you grow the service. We’ve seen several video sellers offer a low rate for early subscribers, raise the price after a certain amount of time, and track how that affects their conversion rate. The promotional price will bring people into the service, and they tell their friends how great it is, leading to more signups at the higher price. Conversely, if the promotional price doesn’t attract many subscribers, it’s a sign to either drop it lower or improve the product offering.

Does certain video content typically cost more than others?

The more niche the content, the higher the price an audience will pay. Generally we’ve seen niche episodic content priced between $5 - $7 per month, fitness and instructional content at $10 - $15 per month, and educational content even higher.

Is it better to offer a monthly recurring fee or a discounted annual fee?

Try both. On VHX, subscribers choose the yearly option only about 7% of the time overall. But people like options! And if you are running a subscription channel, getting subscribers locked in for the longer period means they’re more likely to stick around, and you get paid up front.

One way to incentivize the annual option is by offering the yearly subscription at a discounted rate and clearly communicating the savings by comparing it to the monthly rate times twelve. This pricing strategy has worked especially well with sellers who discount as steep as 50% off on the yearly subscription. For some of these services, we’ve seen subscribers opting more for the yearly subscription than for monthly subscriptions.

Any other pricing tips you can share?

Free trials are a great way to get more people onto your service because you’re offering the content to them free for a period of time, with no commitments. Let’s look at the numbers: We’ve seen conversion rates double with free trials. So, yup, this sales strategy is a viable way to grow your video business from the get-go.

Promo codes are also a great way to get more people in the door. You’re offering them access to your premium content at a discounted price, which is pretty attractive for potential customers. Black&Sexy TV was one of the first VHX sellers to experiment with this feature and they saw 26% growth in sales in just one month.

Growing your business is a constant.

Keep working on pricing. Try testing different sales and marketing strategies, analyze your customer data, and always get feedback from them so you can continue to improve your pricing strategy and scale your business.

Ready to start selling video? Let’s do it.

For more general tips, check out 10 Strategies for Pricing Your Work.