30 JUN 2020

CHURN RATES INCREASE TO 41% AMONG OTT SERVICES IN Q1 2020

Parks Associates' insights reported that the churn rate for OTT services in the USA increased from 35% in Q1 2019 to 41% in Q1 2020. As the Covid-19 unfolded, more than two in five US broadband households have used an OTT service, and 8% of households have tried four or more services.

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Parks Associates contributed to the StreamTV Summer Research Summit on Tuesday, during which Research Director, Steve Nason will present the report,  "The Impacts of COVID-19 on OTT.” The note features important consumer and industry findings, reporting that the churn rate for OTT services increased from 35% in Q1 2019 to 41% in Q1 2020. “We are seeing a record number of consumers experiment with new OTT services as a result of the COVID-19 crisis and the shifts in strategy in the industry,” said Nason. “OTT services are offering extended free trials to build up engagement, and 8% of US broadband households report they have subscribed to at least one new OTT service since the COVID-19 crisis began.”

As the Covid-19 unfolded, more than two in five US broadband households have used an OTT service, and 8% of households have tried four or more services. Among the new subscriptions, a substantial amount came from Disney+ as the service reported 49% subscribers. AppleTV+ also received more viewership and subscription amid the circumstances, at a 27% increase.

With fewer households on lockdown, services are relying on original programming are delivering new content since many productions have been paused. As a result of the delays, Nason explains that companies are developing content strategies. Conglomerates like AT&T for Warner Brothers and Comcast for Universal Studios have expressed concerns about the delays in content production on the launches of new services, such as HBO Max and Peacock.

An average of seven in ten has subscribed to at least one OTT service they have trialed and free trials have contributed to the growth and are considered effective with attracting customers. Nason explains that OTT services should focus on building a form of engagement between consumers and the content, especially during a period of accelerated consumption. “OTT services have the opportunity like never before to win over new video consumers and retain them as long-term subscribers,” Nason said.

 

We are seeing a record number of consumers experiment with new OTT services as a result of the COVID-19 crisis and the shifts in strategy in the industry.” Steve Nason Research Director, Parks Associates