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.
The handbook · 7 volumes
Fora Soft Video Engineering Handbook
LTV caps what you can spend to win a subscriber, and churn and delivery cost per viewer both pull it down. We wrote seven volumes covering the video stack; for LTV start with Volume 3 on QoE and the economics of streaming, then Volume 1 on encoding efficiency, with delivery in Volume 2. Written by Nikolay Sapunov, CEO at Fora Soft.
Acquisition costs rising faster than subscriber lifetime value?
We will review your churn, QoE, and delivery data and send a plan linking playback fixes and cost savings to LTV. 250+ video products shipped since 2005.
