13 MAR 2020

OTT SERVICE CHURN REACHED 35% IN 2019

The churn rate among all OTT services during last year was 35%, up from 25% in 2018 and a trend that operators will want to curb, according to a new study from Parks Associates.

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The churn rate among all OTT services in 2019 was 35%, up from 25% in 2018 and a trend that operators will want to curb, according to a new study from Parks Associates.

Of US broadband households that cancelled at least one OTT service in the past 12 months, the biggest reason cited was a need to cut household expenses. This was followed by an inability to find good content to watch and price increases. Other reasons cited in the study are the end of a promotional period, a lack of time to use the service and the decision to opt for an alternative platform.

Elsewhere, the study found that churn among vMVPDs in 2019 was an alarmingly high 81%. However, two-thirds of respondents said that they would find it difficult to give up at least one of their current subscriptions.

“Overcoming high churn and driving engagement are notable challenges for video service providers, especially as the market becomes more saturated and penetration rates slow. OTT services are offering free trials and promotional offers to drive initial service uptake, but these tactics are also leading to sky-high churn rates. To secure long-term subscriber fidelity, providers need to offer more, including original content and a personalized user experience,”  Steve Nason, Research Director at Parks Associates, indicated.

Overcoming high churn and driving engagement are notable challenges for video service providers, especially as the market becomes more saturated and penetration rates slow” Steve Nason Research Director at Parks Associates