LTV (lifetime value) estimates how much revenue an average subscriber generates over their entire relationship with the service. At its simplest it is roughly ARPU divided by churn rate: the lower the churn, the longer they stay, the more they are worth.
LTV is the number that makes acquisition spend rational - you can profitably spend up to some fraction of LTV to acquire a subscriber. That is why reducing churn is so powerful: it raises LTV across the entire base at once, which in turn justifies investment in retention drivers like recommendations, QoE, and content. LTV versus customer-acquisition cost (CAC) is the central equation of subscription economics.
