Parks Associates resumed its Future of Video event, which highlights the Covid-19’s impact on the OTT market, its long-term impacts, and the strategies market players have implemented to endure the hardships and fulfill consumer demand for new video services. Less than half of US broadband households subscribe to four or more OTT services and 82% of US broadband households have an OTT subscription.
Parks Associates continued its annual Future of Video event with two sessions, “Retention and Churn in OTT,” during which experts representing Plex, Tivo, Bitmovin, XUMO, among other companies, discussed customer churn, the growth of related OTT services, and retention of related subscribers. “Data and Decision Making in Video Services” session highlighted data’s ability to help develop reliable, engaging, and high-quality platforms. “New services are employing a variety of growth strategies including external partnerships to expand their reach and market footprint and augmentations to their offerings to grow share and increase retention,” said Elizabeth Parks, President, Parks Associates. “We look forward to talking about all the disruptive activities at Future of Video.”
The researcher shared its latest data relating to the churn and growth of the market, including its first-quarter survey report of 10,000 broadband households, which suggests that only 46% of consumers subscribe Q1 2021 survey of 10,000 broadband households showing that 46% of US broadband households subscribe to four or more OTT services and 82% of US broadband households have an OTT subscription, compared to 76% in Q1 2020. The average SVOD household has over 100,000 titles available to them at any given time.
30% of consumers admit that they only subscribe to OTT streamers to watch a specific program, 50% say they subscribe with no initial plans to cancel, and 61 say they do not purchase streaming outlet subscriptions on impulse. Overall churn and subscription cancellation rates have also been rising, with high price points, consumers’ efforts to save money, and their decision to cancel once they are finished watching their favorite titles serving as the largest causes of rising churn rates and subscription cancellations.
Platforms offering movie titles solely have seen higher churn rates than platforms offering original and episodic content. While Netflix holds the leading spot in consumer retention, newer services see the bulk of cancellations as most consumers prefer staying with services they have already gotten to know.
The executives highlighted machine learning and artificial intelligence as one of the most effective methods to retain consumers. The method uses human intelligence to collect requested service data and tracks consumer patterns humans wouldn’t otherwise note with a single algorithm. Bundle offerings, such as Tmobile with Netflix, and Hulu with Spotify, are also an effective way to boost subscriber count and avoid rising churn rates. To further avoid churn rates, platforms should consider implementing content personalization methods instead of a segmentation one to fulfill the needs of all consumers. Flexible prices, subscription pausing abilities, and lower price tiers are also effective ways to retain customers. Proper content monetization management is also advised to make up for the cost of free trial offerings. Interactive features such as watch party abilities and regular new content rollouts have also worked great in keeping customers around.
First-party data collected directly from consumers' behavior on the platform have become more essential than third-party data, which is becoming increasingly blocked due to harsher phone privacy settings. The use of ad engagement click-thru rate, viewing rate, and consumer history, such as previous payment activities, social data, and previous content, has also made a difference in adjusting OTT offerings according to the audience’s needs.
Despite the rising number of competitive streaming players following the launch of HBO Max, Peacock, Paramount+, and Discovery+, many more streaming services are projected to launch to fulfill global streaming demands. Theater windows are projected to be affected by the streaming market’s growth but is expected to rise.
By Karla Florez
New services are employing a variety of growth strategies including external partnerships to expand their reach and market footprint and augmentations to their offerings to grow share and increase retention. We look forward to talking about all the disruptive activities at Future of Video.” Elizabeth Parks President, Parks Associates