9 JUN 2021

CHURN RATE, AN INCREASING PROBLEM FOR SVOD PLATFORMS

The aggressive marketing of new streaming services is providing consumers with more incentive to cut the pay TV cord and sign up for new services, but subscriber churn has become an increasing problem for streaming service providers, according to Interpret.

Share

Only 20% of streaming subscribers are content to stay with their current providers, according to new research by Interpret. The aggressive marketing of new streaming services is providing consumers with more incentive to cut the pay TV cord and sign up for new services, but subscriber churn has become an increasing problem for streaming service providers.

Interpret’s “Video Churn Today: Trends, Changes and Outlook 2021” report indicates that SVOD subscribers increased by 14% in the second half of 2020. During the same period, the rate of cancellation increased to 20% from 15% — signaling that churn is not unique to pay TV providers. Pay TV providers saw churn increase two points to 7% during the second half of the year.

“Subscriber churn was a concern for many video service providers prior to the pandemic, particularly for pay TV. The interruption in content, household income, and viewing behavior, along with heightened competition, has led to changes in how consumers value and evaluate video offerings. Users now realize that they can’t get all of their preferred content in one place. The industry is essentially training consumers to be churn tolerant. So, the question for the future is less about how to stop churn, and more about how to make churn work in your favor,”  said Brett Sappington, VP of Research at Interpret.

According to the investigation, consumers who subscribe to multiple SVOD services also have a willingness to watch ad-supported streaming (AVOD) services, providing ad agencies growing inventory on streaming outlets. Consumers, moreover, are actively taking advantage of trials without subscribing, and adding and dropping services on an increasing basis. Nearly 20% of subscribers report switching among services to watch platform exclusives, and 13% report cancelling a service after watching a selected video series.

Users now realize that they can’t get all of their preferred content in one place. The industry is essentially training consumers to be churn tolerant” Brett Sappington VP of Research at Interpret