The Harry and Meghan tell-all documentary has had a huge impact, whether you’re pro-royal family, pro the Sussexes, or simply don’t care about either. Today, we want to focus away from the palace drama, and onto its commercial implications for Netflix, where it was streamed.

Despite (fairly predictably given the subject) negative reviews, the series has done its job in Netflix’s eyes. The documentary broke the Netflix record by becoming its highest viewed documentary in its first week, with 28m households watching the first three episodes. Experts think this documentary alone will drive 4.5m more new Netflix subscribers than was previously expected, something especially pertinent given Netflix’s shaky start to the year, with the service losing 1.2m global subscribers for the first time ever, and beginning to make layoffs. Put simply, the pond is shrinking for Netflix, and there are some new fish around. With the market reaching saturation, new players like Disney+ are taking away market share, reclaiming their back catalogue and forcing Netflix down the route of content originals, creating significant monetisation difficulties.

So Netflix have scored a big win with the documentary (and admittedly with other hits this year like Wednesday and Dahmer), but given the market they operate in it begs a big question- how do you keep those subscribers once you’ve got them?

From our work across subscription businesses in media and entertainment, we know that the key to building enduring relationships with subscribers is focussing on engagement above all else.

Companies like Netflix are ahead of the curve on this, using engagement as a common objective and leading KPI. Traditionally, companies look at RFV models (with the key metrics being recency, frequency, and volume) to measure this engagement, or turn to satisfaction scores like NPS as a proxy. But based on our experience across our media clients, and interviewing leaders in the field for our thought leadership, we believe engagement should be measured by slightly different elements: the depth, breadth and frequency of the relationship. Let’s cover these off one by one:

Depth is the level of emotional attachment that a consumer has to a proposition or brand. It is typically measured through the volume of engagement a consumer has (dwell time, viewing hours etc) and consumer sentiment (typically measured through surveys / indices such as Net Promoter Score).

Breadth is the range of products and services that each consumer engages with – leaders in all sectors recognise that increasing cross-product usage typically correlates to both increased ‘stickiness’ and increased consumer value. Typical measures include cross-product holding & active cross-product usage.

Frequency reflects whether consumers are establishing repeat usage habits with a proposition. The cadence of these habits will vary depending on the nature of the product or service, but increasing frequency of usage has a strong correlation to purchase propensity, retention and revenue per user. Typical measures include repeat visit rates & active days usage.

This engagement allows you to push subscribers up the ARPU curve on this chart, to generate increased usage and data, and therefore subscriber value:

So what do these engagement metrics mean Netflix should do to keep its windfall?

Focus on high engagement content above filler, to increase depth.

One of the key problems we see amongst our clients is focus on volume, not quality of content. Netflix might have had some hits this year, but it also created 398 new titles, the majority of which are languishing in the dusty corners of the streaming platform. By focusing more on fewer titles, and using their world class data science, Netflix can ensure more resource goes to the shows that drive the vast majority of engagement, like our titular documentary.

Create more stopping off points on the ARPU curve, to increase breadth and frequency.

Currently Netflix’s product range makes it hard to engage with non-subscribers, as their single product approach means they only get good data on their full subscribers. Netflix has recently launched a non-ad free product with a lower subscription price (although indications are that this has gone poorly), in order to help them expand to less developed markets with lower purchasing power, and to compete with new entrants in the VOD market.  This forms a crucial mid-point between anonymous audiences and full subscribers on our ARPU line, that allows Netflix to drive known consumers up the ARPU scale towards full subscription, and build data early. Getting the formula right on this, and other intermediary products will be key to driving increased retention in full subscribers.

Build more features that encourage more regular engagement in addition to watching programmes, to increase all our engagement metrics.

Netflix are currently experimenting with a gaming feature, and have dipped a toe into the “choose your own adventure” market with Black Mirror: Bandersnatch. However there’s additional value to be gained from product features that encourage engagement outside of simply watching a programme. Community and social features are notoriously hard to get right, but could yield dividends with everyone keen to discuss their favourite programmes, and as tech advances it could offer up innovative possibilities around fields like VR.

In conclusion, Netflix has done everything right with Harry and Meghan, and is likely to keep reaping the windfall from their $100m investment in the couple, but a hard task remains ahead. By using this as an opportunity to drive engagement, Netflix can ensure they retain the benefits, and the subscribers they’ve invested so much in acquiring.

You can find out more about our thinking in our engagement economics report here.