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The Startup

How a Niche Player Like A+E Networks Can Stand Out in the Streaming World

closeup of a tv remote control in front of a screen
Photo by Kelly Sikkema on Unsplash

The past year has been wild and woolly for the streaming video world (also known as OTT for Over the Top — a reference to content that doesn’t go through the cable intermediaries).

Every organization that has video content is trying to figure out how to build a direct subscription relationship with their customers. If you’re Amazon, Netflix, Apple or Disney, or even an educational player like LinkedIn Learning or Coursera, you can play a volume game, with enough content to provide something for everyone. But what if you’re a niche player, with specialty content?

I recently interviewed Piper Rosenshein, VP Subscription Video Services at A+E Networks, who shared her tips for creating a customer-centric approach and a lasting digital subscription model. We discussed how to operationalize a digital subscription businesses, how to minimize cannibalization in a business that already has a successful model, and how to manage a recurring revenue business in a time of change.

The following interview is adapted from my podcast, Subscription Stories: True Tales from the Trenches.

Piper Rosenshein: I started my career in e-mail marketing. Most of my clients were financial services and retail. Over the first several years of my career, I moved around a bit. Among those industries, including at American Express, which, although it is a financial service company, really is a marketing and membership organization. Many of the principles there are about building loyalty and building long-term customer relationships. After leaving American Express, I was at Saks, where I manage the credit card program there of the Saks MasterCard. Another example of a loyalty program and building long-term customer relationships. But my first true experience managing hands on a subscription business was at Barnes & Noble, where I managed the membership program, and that business was going through a lot of transformation. We were competing with Amazon and asking people to pay us to become members. So we had to be very thoughtful about giving them benefits that would encourage them to stay with us, as there was now more competition in the marketplace. After being in that role for several years, I moved to The New York Times where I ran retention marketing for both the print and digital business at a time where media and news in particular was going through quite a transformation. So prior to my role at the company, there hadn’t been anyone running retention marketing. It was all about acquisition because it’s The New York Times. Once you subscribed, you tended to stay. That was true in the print business. Once digital really took off and there was so much free digital news, it became much more competitive and much more important to keep the people who were your paying subscribers for both areas of business. And now for the past three years, I’ve been at A&E Networks where I manage our subscription video products, which is still a relatively new industry and a new product for a large linear television network like A&E, which traditionally had not had direct to consumer relationships. But now in the world of Netflix and Hulu and you know, the Disney Plus’s of the World, we are also in the game of having direct relationships with consumers. And that’s where my experience has come very handy at a company like A&E.

Robbie Baxter: It seems like your whole career has been around finding deeper engagement and understanding of customers with digital marketing and then loyalty programs. I featured American Express in my first book, The Membership Economy, because they’re one of the organizations that’s been around a really long time and has always had that member mindset. What is it that’s attracted you and kept you in this space?

Piper Rosenshein: I think part of it is my personality. I joke I left American Express ten or twelve years ago and I still use my gold card pretty much exclusively. I am a loyal person. As a consumer, I like getting points, I like getting loyalty memberships. I joke that marketing works and it works on me. That actually just makes this more interesting to me professionally. But I’ve also worked in e-commerce, retail. And to me, when you think of the difference working at a Barnes Noble or Saks, you’re kind of sprinting from one season to another. It’s the holidays, then it’s Valentine’s Day, then it’s Mother’s Day, then it’s Father’s Day and it’s this constant sort of start and stop. And you have a strategy for each season. While there’s a lot that’s interesting and exciting about that, it can also be a little bit exhausting. And it’s not, at least for me, looking at things as big picture long-term. When you think about something like a subscription business or a membership, which is more of a marathon, it’s a constant ongoing relationship with the consumer. It almost doesn’t matter what holiday or what season you want that person thinking of you and coming back, whatever the next time they’re making a purchase. I think the strategy of that long-term game has just appealed to me professionally. I just find it interesting and fun and gives me more opportunity to be creative, rather than having that sort of holiday to holiday sprint.

Robbie Baxter: That is a good metaphor. The difference between a sprint and the marathon of a subscription, and the understanding that it takes a while for a subscription business to kick in. But then it’s the gift that keeps on giving.

Piper Rosenshein: I’ve actually also in the past described a subscription business like a relationship or a marriage where there’s usually not one great date doesn’t lead to a marriage and one fight usually doesn’t lead to divorce. There are some exceptions, but generally speaking, it’s kind of this ongoing sequence of events that builds a relationship or that damages a relationship. And that is the way I think of a subscription or direct to consumer business. If you think of retail, it’s a point in time you’re trying to make a decision what you’re buying your mother for Mother’s Day, and that may or may not have any influence on what you buy your father for Father’s Day, but in a subscription business, you’re always thinking about the next time the customer is going to make a decision about their relationship with you.

Robbie Baxter: It is very much about the relationship. And like a marriage or another, long time commitment, it really is about trust as well. So you’re at A&E now. And you mentioned that your skills and experience are really helpful in that even though A&E is a large successful business, subscription is relatively new for them. So where were they with their subscription business when you joined? And what were the big challenges that you were asked to take on?

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Piper Rosenshein: So I joined the company in May of 2017. At that point, A&E had already launched two subscription video products, Lifetime Movie Club and History Vault. They had launched about a year to a year and a half before I joined the company and they were launched somewhat of a proof of concept. So we as a brand have the benefit of owning a lot of our content. And so we had an asset in our archive content and we believe there was a market for it. But there were some people in the company who thought this was a gamble. It may or may not work. So they didn’t actually hire a team to manage this business. They had some internal development and product resources, but it was largely a team effort across marketing, CRM, digital.

Robbie Baxter: This is a common issue with businesses that are already successful and then they’re experimenting with subscription off to the side. There’s a risk of investing too much and having it take away from the core business. And also, there’s a real focus on the core business getting all of the assets.

Piper Rosenshein: There was people who thought in six months this would end. There were people who thought there was a long-term future here. So initially they didn’t hire anyone to run the business. And about a year into it, they realized that there was an actual business opportunity here. So both products had started growing organically on their own. There was positive customer feedback, but there was also a recognition internally that, first of all, having a half a dozen people work on this on the side wasn’t really giving it the attention it deserved and it was actually taking those people off of other things that were also a high priority for the business. Second, there were just certain functions that hadn’t been thought of before because it wasn’t a direct consumer business. So there were new things like customer service, recurring billing, and ongoing email communications to people once you’ve actually got them to sign up. Someone with subscription experience who could bring all those things to the table could effectively run these businesses. And they’re pretty small businesses. At the time, it was a one person job. So I was hired essentially as the general manager of these direct consumer businesses to come in and really look at what had been done, figure out what was working, but even more importantly, figuring out what’s the opportunity here, what scale could we achieve and what do we need to do to get there?

Robbie Baxter: How were you received when you said that some people really believed there was potential here? Other people either thought it wasn’t a big opportunity or actually worried that it could cannibalize the healthy business that they already had. How is your reception and culturally, what did you notice when you got there?

Piper Rosenshein: I would say overall, you know, A&E’s a very warm company. Everyone is very welcoming and they were excited that there was somebody who came from a different background who brought something new to the organization. Half a dozen people there that had been doing this as a side job were thrilled that they could now go back to their full-time job and have someone to really take this business that they put a lot of energy into and see it forward. Then I think there were some other folks that while they were personally very welcoming, there was an element of nervousness that all of a sudden somebody was here to really drive these businesses forward. And what if that meant taking resources or cannibalizing the larger business? So I think it was a balance of excited that I was there and that I brought a new perspective and a new background, but also a bit cautious.

Robbie Baxter: It was like a zero sum game and cultural worry. When you were new to A&E and you were working to win people over and build support for your endeavor, what were the metrics that you focused on early on?

Piper Rosenshein: One of the benefits of a direct to consumer business is that you have data from every step of the journey. And when you think about a traditional cable business, we get ratings, but we don’t necessarily know as much about the individual customer experience. So it was a great opportunity for me to educate people about the customer funnel and be able to share with them data from each step of the way. How many people came to our landing page to learn more about their products? How many of those people actually converted to free trial? How many of those people then converted to paid subscriber? How many of those people stay in a month over month basis? And then why are they leaving? What are they telling us? And how can we learn from it? And that data is just more granular insight than we have from some other areas of business. And it was really interesting to people and it was also helpful for us in making business decisions when I was relatively new to the organization. There was more concern about cannibalization, both actual in terms of people literally deciding to cut the cord, but also in the perception among the cable community and among our distribution partners. We didn’t want to appear that we were taking viewers away from linear and moving them over to a lower priced product. So we started out more conservative when I joined the company, we had fifty movies live in Lifetime Movie Club and it was growing, people were signing up and people enjoyed the product. But we heard a lot of feedback that people wanted more. I know you have more. I remember this movie than I watched twenty years ago. Why isn’t it there? And so what I did not do was walk in and say we need to go from fifty to five hundred because that just wouldn’t have happened. So what I did was I over time gathered data. We did surveys. We got feedback. And we then shared that with the organization and told them that people are looking for more. We believe there is more opportunity to grow this business. And we’ve taken baby steps. So we went from fifty to a hundred movies and now we’re up to two hundred movies. But it’s taken us over two years to get there. And each time we made a change, we sent those surveys again. We watched the data. We looked for feedback. We looked for any indication, positive or negative, about the change that we had just made. We were very mindful of it. We also make sure that we are talking to the right stakeholders in the organization so that nobody’s caught off guard, so that nobody gets a phone call from a partner that they didn’t expect or that they weren’t prepared for. It’s always a decision that’s cross-functional, that’s based on data, but also based on customer feedback and based on the world around us. So we were one of the first smaller subscription video on demand players in the space. And now when I look at something like an Amazon channels- I think they have over one hundred and twenty Amazon channels. Some of them are the large players and some of them are also smaller players like we are. Part of their, our, change has come from data and from learning. Part of it has come from just the world around us, realizing a lot of different players are now in the game and they’re taking measured risks. If we are able to take those risks and measure them and be smart about them, we’re more comfortable making changes as we go.

Robbie Baxter: I wanted to ask you about your linear audience vs. your subscribing audience and whether you see differences in their behavior and who they are. Are they different segments? Is it the same people? What’s the relationship between linear and subscriber?

Piper Rosenshein: Yeah, we’ve really found in a lot of this, again, as their surveys and direct customer feedback that we essentially have two audiences in the product. You do have people that are cord cutters that have chosen, for whatever reason, to no longer pay for cable and they are looking for History or Lifetime or A&E content in an over the top or SVOD world. But those people have an affinity to our brand. So at some point they were watching on linear. At some point they have that memory of the movie or the documentary that brought them to us in the first place. The other audience are people who are still heavily watching linear, who are really our brand super fans, and they want to see what’s on television and they want to see more than that. So the way I often talk about our products is we don’t have a twenty-four hour schedule like you do on television. We’re endless. We can have hours and hours of content. So for somebody who just loves Lifetime movies, she may watch what’s on TV on Sunday night and then look for more. That’s where we’re able to supplement and complement what she’s watching on our linear with additional content wherever, whenever, she chooses to watch.

Robbie Baxter: So you bring up some important points. I love this concept of, you know, test and learn, test and learn, build your learning so that you as the general manager are more confident in your decisions. You then have more leverage and more of a way to explain and make your case with both colleagues who are competing for limited resources, and to explain and convey your decisions to your partners, the cable companies and so on. I like how you did that in a very measured way. I like how you brought in the fact that what’s going on in the larger world. Streaming services have exploded in the last couple of years and even lay people are starting to understand what SVOD is and what OTT is. And you know, how most businesses that have content or that have channels to distribute content are trying to control the whole thing direct to the consumer. So what’s on the horizon has really changed. I love that you’re keeping an eye on the horizon with your telescope, but you’re also using your microscope to really understand how your subscribers behave and how your linear customers that go through a third party are behaving. You are cautious about how you evolve your business model.

Piper Rosenshein: What’s also been interesting is one of the things we’ve learned also through survey feedback is that some of our customers have actually told us that after signing up for one of our SVOD services, they’re not only watching there, but they’re actually watching more on linear because it’s just reminding them how much they love the brand and how much they love the content. We feel like in some cases, not only are we not cannibalizing, we’re actually strengthening because we’re creating a super fan for the brand at large and that we’re just giving that person more options of where he or she chooses to watch. That super fan, means more stickiness with the brand overall if you’re giving them what they want when they want it.

Robbie Baxter: I imagine that was a surprise to find that.

Piper Rosenshein: It was. But it’s it’s one that I think has been really eye opening and really comforting as we thought about making changes to the product. I talk about data a lot and as much as metrics and viewing data and actual hard numbers are important, I think survey data and customer feedback is just as important because in data you’re looking for what you’re looking for. But sometimes a comment, something somebody says in a survey is not something you ever would have thought of until someone pointed it out to you. And that’s where you can find a real nugget that changes how you think about the business.

Robbie Baxter: Great. We used some terminology here, SVOD, linear, subscription. Can you explain what those different terms mean and also what it means to cut the cord?

Piper Rosenshein: Sure, so when we talk about the cord we’re talking about cable so your cable connection. So if you’re someone who is a cord cutter, you have cut that cord and you are no longer paying a cable provider for your television access. Linear viewers are people who are still watching television through their cable provider. When we talk about a subscription video service, those are people who are paying either through an app store, or are paying us directly through our website, or paying us through a channel environment like Amazon channel for complementary video content.

Robbie Baxter: So Piper, when you introduced yourself you mentioned the vault at A&E. These assets of content that are so valuable and that people love. What has been the role of that vault in building out the subscription?

Piper Rosenshein: It’s been a huge role. So being that we are still a smaller business relative to the company at large and that we as an organization are very focused on profitability, had we needed to spend millions of dollars to acquire content for these services, I think it would’ve been very difficult to get them off the ground. We would have been making a very large upfront investment on essentially an experiment that may or may not have paid off. And in our case, because our leadership team many years ago had the foresight to own a lot of our content or in the cases where we acquire content to acquire those with long term digital rights, we actually had an inventory to work with that didn’t cost us more than a modest incremental cost. We weren’t looking at spending a large sum of money to build a library of content. So we literally, in some cases, were taking things that had been sitting on a shelf for years that hadn’t been monetized, but that we believed was an audience because they had remembered this content from when they were younger. They watched the movie with their mother twenty years ago. We have very loyal super fans of our brands and we see it in customer feedback all the time. I joke that some of the feedback we get is so specific that I think, wow, I don’t remember anything that detailed about any movie I’ve ever watched. So finding that content that they remember fondly from years past really appeals to them. And it didn’t cost us a lot of money to get that content off the ground.

Robbie Baxter: I want to move to this environment that we’re in right now. April of 2020. Most people in the United States and actually globally are sheltering in place, staying at home. And I’m sure that’s had a big impact on your business. Can you talk a little bit about what you’ve seen and what challenges and opportunities it’s brought for you?

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Piper Rosenshein: Sure. So it’s it’s a little different for our different products. So with History Vault, we have what we consider to be kind of educational entertainment content. And with so many students really of all ages at home now, we felt there was an opportunity to just give people more access. Our content is really more for the high school student. We’re not competing with Noggin for the five- or six-year-olds. And it felt like in the first week there was just a ton of content for a younger elementary school child. So our content appeals to a different audience, still an educational audience. So outside of just History Vault is something we’re calling History at Home. So if you just go onto History.com, you can find a bunch of educational content group by topic, so that even if you don’t want to start a free trial, if you, for whatever reason, just are sampling the content, we put more available in front of the wall that we feel meets that educational need. And we’ve seen a lot of positive customer feedback, both, again, in terms of comments and posts on social media as well as engagement. So both History at Home as well as History Vault have seen a nice growth in viewership over this time period where people are at home.

Robbie Baxter: One of the things I’ve been asked a lot is what is the role of free in a crisis and what is your obligation to your existing subscribers? What’s your obligation to tomorrow’s subscribers? What is your obligation to your community at large? So I guess the question I want to ask you is, and I don’t want to put you on the spot here, but how much of this is what I would call altruistic? We’re taking care of our community. We know the kids need the history content, but how much of it is smart marketing?

Piper Rosenshein: We were trying to find the balance of both, truthfully. We debated internally whether or not we should remove credit card from the free trial sign-up flow. And ultimately, we decided to keep it in there for a few reasons. One, we wanted to get this up soon. We wanted to get the content available to people. At the time that this started, we didn’t know if we’d be home for two weeks, two months, you know, who knows? It’s been, what now? Six or seven weeks. And I don’t see us running around outside again anytime soon. So we just wanted to move quickly. And there was a logistical question of us all working remotely right now. Is this the time to start changing our backend registration flow? But the other consideration was with or without a credit card, people might not want to go through a sign-up process. They may just want to get straight to the content. And so that’s where we thought of this sort of hybrid approach where we did the extended free trial still with the credit card. But we also made a lot of content available in front of the wall so that if you really just want to watch America The Story of US, which is a documentary series about the history of this country, with your children, you can do that without having to sign up. But after watching that, if you want to watch more content about American history or ancient history or any topic, then you can go through the sign up. You get thirty days free. You can cancel at any time. We felt like we were trying to give you both the kind of altruistic, educational, no strings attached opportunity. But then for ourselves, still give ourselves some business outcome in the future by asking people to sign up and give us a credit card. Again, cancel anytime. We won’t charge you until your thirty days are up.

Robbie Baxter: I’m sure you’ve tried to forecast what is going to happen when things go back to the new normal or forward to the new normal. Kids aren’t necessarily at home setting, plus summer is coming up. How are you thinking about onboarding for engagement? And what are your expectations around that, with this totally unprecedented spike in usage?

Piper Rosenshein: We focuses first on history, then we A&E | Watch Full Episodes of Your Favorite Shows (aetv.com)added Lifetime Movie Club. Our hypothesis at the time was education is where people will be looking first. And in a few weeks, if this continues as it has and people are home, they’re going to be looking for that entertainment content. And that’s actually exactly what happened. We saw a really big spike in the beginning for vault. And then a couple weeks later we saw it for Lifetime Movie Club. People were like, you know what? I’ve seen the documentaries. I need to just tune out and watch something that is a little bit more of an escape. We’ve just tried to be as nimble as we can, so we went into it with a thought of how long we’d run the free trial. And we’ve already extended it twice because we just felt like what we were seeing in the marketplace, what we were hearing from our distribution partners, it just wasn’t time yet to to stop the free trial. So it’s actually still running and will be for a bit longer. We’re evaluating as we go. We’ve been really pleased with the number of people in free trial and we feel like we do have an audience that’s clearly come to us for content. The next big question is how many convert and choose to pay at the end of their free trial. And even for people who pay: How long do they stay? Or are we looking at perhaps a shorter lifetime for people? Because after a few months once, hopefully we are able to go back to some semblance of normalcy. Nobody’s going to want to watch TV because that’s all they’ve been doing for however many months at that point. So I would say from a financial forecasting perspective, we’re being very conservative. I’m not telling my finance partners that we’re upping our numbers because all of these people are in free trial. We just don’t know. And I think with the way we’re thinking about it from that point of view is any upside will be a pleasant surprise. It’s going to be upside. But we’re happy that we’ve been able to offer our content. We’re happy that we have an audience. We hope that these people choose to stay with us. And if nothing else, we hope that when they think back to this time period, our content somehow helped them through it, either because it helps them educate their child. It helps them escape from reality for a few hours. So if there’s upside financially, that would be great. If there’s more loyalty to the brand that would also be huge.

Robbie Baxter: What are some of the non-financial reasons and how do you track whether or not you’re achieving those goals?

Piper Rosenshein: So financially, obviously, we’re looking to grow the number of paid subscribers which ultimately result in increased revenue. From a non-financial perspective, it’s about viewership. We hope people watch our content, and have positive feedback about it. We look at things like reviews on social media sites. We look at App Store reviews. We want people to engage positively with our brands and to think of our brands as part of their life and part of their decision-making process when they are watching television. We’re hoping that some of these free trials or a lot of these free trials convert and choose to stay with us. But if we don’t if we’ve had more people watching our content, if that resonates with them and perhaps they choose to come back at a later time, either in a subscription world or in our linear world. Then we have still helped support our brand and expand our audience and reach.

Robbie Baxter: First subscription you ever had?

Piper Rosenshein: Probably Highlights magazine when I was a kid.

Robbie Baxter: Your favorite subscription now?

Piper Rosenshein: Spotify.

Robbie Baxter: Your superpower?

Piper Rosenshein: I’m pretty diplomatic, and I think that serves me well, especially in my current role.

Robbie Baxter: What do your employees and colleagues love about working with you?

Piper Rosenshein: I’m honest. I give constructive feedback where I have to, but I also don’t beat people up. I try to balance the positive with the negative. I crack jokes at the right moment in a meeting. I think I’m generally pleasant to work with, and I’m really passionate about what I do and I think that comes through.

Robbie Baxter: What don’t they like about working with you?

Piper Rosenshein: I’m pretty persistent when I have an idea and I think it’s the right thing for the business. I don’t give up easily trying to get my way.

Robbie Baxter: So if there’s one thing that you want people to do or think as a result of learning from you, what would you teach them?

Piper Rosenshein: I would teach them to think about the sprint and the marathon, as I talked about earlier. I’ve learned something valuable from every job I’ve had in my career. And I think after working several years in e-commerce, retail, the holiday seasons wore me out a little bit. I loved the business part of it, but it was challenging in my personal life. I was able to take that experience and sort of flip it into something else. Now I’m running a subscription business and I love it. And I think what I learned from my e-commerce retails days have really paid off here. So I think my lesson is, you know, every career opportunity is going to teach you something and it’s like a stairway. If I hadn’t worked at Barnes Noble starting off on the e-commerce side, I wouldn’t have run the membership program. If I wouldn’t have run the membership program, I wouldn’t have had my job at The New York Times. And if I hadn’t done that, I wouldn’t be here right now. Just take every opportunity, learn from it, and you never know where you’ll land next.

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Robbie K Baxter

Robbie K Baxter

Author of THE FOREVER TRANSACTION & THE MEMBERSHIP ECONOMY; Leading expert on membership models and subscription pricing. http://www.robbiekellmanbaxter.com