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>According to the firm’s new report on Quibi’s early growth, the short-form video platform signed up about 910,000 users in its first few days back in April. Of

>According to the firm’s new report on Quibi’s early growth, the short-form video platform signed up about 910,000 users in its first few days back in April. Of those users, only about 72,000 stuck around after the three-month free trial, indicating the app had about an 8 percent conversion rate. I fully expect Quibi to crash and burn under the weight of the content costs among other things, but is an 8% conversion rate bad for converting from free to paid? What's the appropriate benchmark for this kind of thing?

mindvirus 6y ago
Especially given that Disney managed 11% conversion with their awesome catalog and brand recongition. It seems 8% isn't so bad.
- deleted 6y ago
  [deleted]
- Macha 6y ago
  And Disney+ trials do roll over into subscriptions without user action which is mentioned as a factor elsewhere in this thread.
- kingkawn 6y ago
  But they got 11% of millions more people, and have subsequently signed up tens of millions more
- wutbrodo 6y ago
  That brand recognition and catalog would also increase the denominator of people signing up for the trial though. It's not clear to me how these two effects would net out.
macspoofing 6y ago
>but is an 8% conversion rate bad for converting from free to paid? It may be if they based their financials (revenue, debt, and investment) on higher numbers. And I agree, it seemed obvious that this was going to crash and burn very quickly.
crazygringo 6y ago
Exact benchmarks are going to vary per product, but yeah it's bad. For free trials where you don't provide billing info in advance (e.g. a lot of software 30-day trials) 8% would be a great rate. Because the default do-nothing action is nothing. But for subscription services where you do provide billing info in advance, 8% retention is pretty terrible. If 92% of people are taking the effort to cancel, when the default is to let the subscription charge... it's definitely not great. (I'm assuming Quibi required billing info in advance, like pretty much every other subscription content service does.)
- sulam 6y ago
  The largest cohort with these premium services take the free trial and then immediately cancel. Then you have to earn them back.
  - S33V 6y ago
    Do you have a source with that? Based off of the majority of my family members it seems like that would be the opposite. I wouldn't be surprised that there's a correlation between tech-savvy individuals and those who cancel straight to subscription trials right away.
    - sulam 6y ago
      I work for a company with a premium service, and we have a number of employees who have worked on other premium services. It’s definitely true in the aggregate. * Worth noting, since you mention tech savvy individuals, that these are not tech savvy services (although buying a premium service from an app on your phone probably immediately skews you somewhat tech savvy).
      - S33V 6y ago
        Interesting, thanks!
philistine 6y ago
I’d be shocked to hear that only 8% of people convert with Netflix for example. Or Disney+ or any of the streaming services.
- griffinkelly 6y ago
  Do those companies publish their numbers since they're public?
sulam 6y ago
Around twice that would be typical for content service trials.
- mynegation 6y ago
  But who has that kind of conversion rate? Disney with all its weight managed to convert not much more than that - percentage wise, although much more in absolute terms and article make that point. Are there any data points from Netflix, Hulu, Spotify. Amazon Prime is a bit of a different beast, as it is a bundle.
  - sulam 6y ago
    Spotify, Netflix. Also something like Tinder’s premium service is in the teens.
wutbrodo 6y ago
For a very rough baseline: > The industry conversion rate from a free trial to a paid subscription hovers below 33 percent https://www.vulture.com/2020/07/is-anyone-watching-quibi.html https://www.vulture.com/2020/07/is-anyone-watching-quibi.htm...

mindvirus 6y ago

Especially given that Disney managed 11% conversion with their awesome catalog and brand recongition. It seems 8% isn't so bad.

deleted 6y ago
[deleted]
Macha 6y ago
And Disney+ trials do roll over into subscriptions without user action which is mentioned as a factor elsewhere in this thread.
kingkawn 6y ago
But they got 11% of millions more people, and have subsequently signed up tens of millions more
wutbrodo 6y ago
That brand recognition and catalog would also increase the denominator of people signing up for the trial though. It's not clear to me how these two effects would net out.

macspoofing 6y ago

>but is an 8% conversion rate bad for converting from free to paid? It may be if they based their financials (revenue, debt, and investment) on higher numbers. And I agree, it seemed obvious that this was going to crash and burn very quickly.

crazygringo 6y ago

Exact benchmarks are going to vary per product, but yeah it's bad. For free trials where you don't provide billing info in advance (e.g. a lot of software 30-day trials) 8% would be a great rate. Because the default do-nothing action is nothing. But for subscription services where you do provide billing info in advance, 8% retention is pretty terrible. If 92% of people are taking the effort to cancel, when the default is to let the subscription charge... it's definitely not great. (I'm assuming Quibi required billing info in advance, like pretty much every other subscription content service does.)

sulam 6y ago
The largest cohort with these premium services take the free trial and then immediately cancel. Then you have to earn them back.
- S33V 6y ago
  Do you have a source with that? Based off of the majority of my family members it seems like that would be the opposite. I wouldn't be surprised that there's a correlation between tech-savvy individuals and those who cancel straight to subscription trials right away.
  - sulam 6y ago
    I work for a company with a premium service, and we have a number of employees who have worked on other premium services. It’s definitely true in the aggregate. * Worth noting, since you mention tech savvy individuals, that these are not tech savvy services (although buying a premium service from an app on your phone probably immediately skews you somewhat tech savvy).
    - S33V 6y ago
      Interesting, thanks!

philistine 6y ago

I’d be shocked to hear that only 8% of people convert with Netflix for example. Or Disney+ or any of the streaming services.

griffinkelly 6y ago
Do those companies publish their numbers since they're public?

sulam 6y ago

Around twice that would be typical for content service trials.

mynegation 6y ago
But who has that kind of conversion rate? Disney with all its weight managed to convert not much more than that - percentage wise, although much more in absolute terms and article make that point. Are there any data points from Netflix, Hulu, Spotify. Amazon Prime is a bit of a different beast, as it is a bundle.
- sulam 6y ago
  Spotify, Netflix. Also something like Tinder’s premium service is in the teens.

wutbrodo 6y ago

For a very rough baseline: > The industry conversion rate from a free trial to a paid subscription hovers below 33 percent https://www.vulture.com/2020/07/is-anyone-watching-quibi.html https://www.vulture.com/2020/07/is-anyone-watching-quibi.htm...