Film Courage: What is churn rate?
Houston Howard: Churn rate is how soon quickly people get sick of something.
So a kid will play with a toy for 5 minutes and then get sick of it and move to something
else.
That’s churn rate and the faster the churn rate the worse it is because people get sick
of your stuff in a much quicker rate.
You’re flipping through the channels you land on a show, how long are you going to
give that before you flip to the next channel?
On the radio, how long are you going to give a song before you flip to the next song?
Churn rates typically in a competitive environment are very high because there are so many options
now.
I’m just like bouncing from thing to thing to thing to thing.
Back in the 1950’s when there was just radio, then people sit and listen to one radio station
for hours and just listen to the radio dramas and news and they wouldn’t flip to anything
because there was only one thing that they could do now with all the stuff that we have
to do and all of the entertainment options, the oversaturated tsunami of entertainment
that is around us all the time.
Churn rates are very high and that is bad for creators.
We now have to think of how we create.
How do we create a brand that lowers the churn rate of people?
How do we keep them engaged for longer and in more meaningful ways into our brand, into
our stories.
That’s something very important because the longer you can engage the audience and
the longer the valuable engagement takes place, the more chance you have to then convert them
to that loyal audience member or ultimately to what I call a brand evangelist, somebody
who is not just watching your stuff but actually helps market your stuff.
“Hey, did you see the new Game of Thrones this week?”
“Hey you should check out this show You should go watch this movie because it’s
awesome.”
If you can convert them into that, that’s the sweet spot because then you get people
1) loyal to your brand and 2) that are so loyal that they’re marketing your brand
you start to solve some of that P and A [Prints and Advertising] issue we talked about earlier
of having to rely on so much P and A because you’ve activated your fan base to do something
valuable.
But you’re never going to activate a fanbase if they only engage with your stories 10 seconds
at a time.
So now we have to slow that down, get them engaged and have that engagement be valuable.
And if you can do that, then all of the sudden you’ve separated yourself in the marketplace
and solved a major problem in the industry which is these high churn rate issues.
Film Courage: So does this mean we keep our content shorter or give [the audience] breaks?
Houston Howard: Well, it depends.
It depends on your content.
But the thing that people love most is story.
We live in an entertainment culture and people love story more than anything else.
Whereas attention spans may be seemingly low, they’re no longer low if you can engage
them with story.
If you have a great story, they’ll watch it for 10 hours in a row.
And that’s fine.
So a 10-hour binge watch is a very low churn rate, they’re watching for 10 hours.
They are not turning off.
This is where technique and craft come into play.
If you can understand how to hook them, hook them fast, give them new and better things
are going through the story, then all of the sudden you’re starting to lower that churn
rate but at the same time it’s how do we create multiple engagements that if you’re
operating in just network television you have one 1-hour engagement every week and that’s
it.
And so now between your one one-hour engagements you have a week in between, right?
If we can start filling that week with some other things.
As a companion web series like they do on AMC.
Maybe a digital comic that gives them more valuable parts of the story that bridges the
gap between episodes.
What you do every single time is you have your audience engage with valuable content,
valuable story, then slowly you are going to start to lower their churn rate until you
get them to the point that they will watch your stuff for 10 hours.
Typically they won’t do that at the beginning.
It’s a process to getting them to that point to where they will say “Okay, I’ll watch
your stuff” “I’ll watch 60 hours of your content” through a binge watch you’ve
spent the time and made the investment in the “me” as an audience member to a point
to where I’m willing to give this investment into your brand.
And the only way to get to that point is to have as much and as many valuable engagements
as humanly possible and the thing that they value most is story.
So it’s not just marketing and promotions.
That’s a big transmedia misconception and it’s all advertising and marketing.
It’s really story…the best is story-based stuff.
How do I create story-based engagement?
So at SXSW the show Bates Motel, they created a replica of the Bates Motel that you could
actually rent out a room and stay in while you were in SXSW.
That’s cool marketing!
But it’s not transmedia because it didn’t give you more of the story because what happens
is when it’s time to go to the festival, they would open the door and leave the room
and come back and they had very limited time in the room.
But if some way the took a picture off of the wall to discover that Norman [Bates] had
written a message behind that picture.
If they were to take the Gideon’s Bible out of the desk and it’s not a Gideon’s
Bible at all.
And maybe there is an object in there.
Maybe it’s a journal written by Norman that gives more insight into his character and
some insight into some story lines.
There are creaky floorboard that you can pop up and stuff under there.
You flip over the mattress and there is stuff in the mattress, maybe stuff in the mattress
you have to rip open and find.
If you can extend the story in such a way that the hotel room becomes part of the story…now…now
what has happened is you’ve created longer points of engagement for that fan base.
And the fans that are in the room maybe don’t want to go outside because they whole room
is part of the story that they love.
Presumably they don’t stay in the Bates Motel unless they watch that Bates Motel show
or even if they do, maybe it’s a mechanism to get them to watch the show.
But you are going to have a better chance to get them to watch the show as you start
to seed the story and extend the story in a really interesting way.
Maybe you never watched the show before but based on this experience that you have all
these weird story clues and interactions that you discover in this room.
Now you have an even greater chance of checking it out far beyond just a marketing experience.
It’s how do we create lots of really valuable story based engagements for the fan base?
And every single one of those engagements creates a lower churn rate.
So maybe the churn rate is very high for somebody…I’m ADD, I’m distracted, I like to do a 100
things, I don’t like watching long-form TV (I just like watching web stuff, Youtube,
all that stuff).
If you can just slowly start giving story-based engagement to that audience member and then
you start to lower the churn rate, lower the churn rate, lower the churn rate, lower the
churn rate until eventually you can get them to the point of saying “I’ll watch your
stuff for 10 hours in a sitting” because you’ve invested into “me” so much all
ready.
Does it makes sense?
Film Courage: It does!
Houston Howard: Great!