The average annualized subscriber churn rate for streaming video services now stands at 47%. The top driver of service cancellations is the desire to save money, with 29% of Internet households saying they cancel a service for this reason, while finishing a show is the next most popular reason, according to Parks Associates’ latest "Video Services: Shifting Demand" study, which presents a focused analysis of the video services landscape, including insight into why consumers are switching and canceling streaming services.
“Consumer focus on price and content underscores the pivotal role of value in consumer decision-making. When high-quality content is absent, subscriber churn becomes inevitable, making content diversity a cornerstone of profitable growth, along with consideration of pricing,” commented Sarah Lee, Research Analyst at Parks Associates.
According to Parks Associates, rapid changes in viewer behaviors, coupled with the ongoing Writers Guild of America (WGA) strike, emphasize the content conundrum in today’s video services market. A steady flow of scripted content is pivotal to viewer engagement, but it is costly and prone to disruption. Providers need to align content strategies with evolving viewer demands and greater emphasis on financial returns, which accounts for the recent rise of Free Ad-Supported TV (FAST) and Advertising-Based Video on Demand (AVOD) services.
Based on a survey of 10.000 US internet households, the "Video Services: Shifting Demand” research investigates the dynamics of traditional pay TV, streaming TV, and OTT services, dissecting subscription, ad-based, and transactional business models. This research reveals data about what consumers value most in their entertainment services and what is effective in keeping them. By examining historical data on adoption, satisfaction, and churn rates for pay TV and OTT services, the study uncovers valuable strategies to retain subscribers and enhance revenue streams.
Parks Associates will feature this research along with executive insight on industry trends at the sixth annual Future of Video, hosted at the Marina del Rey Marriott in Marina del Rey, CA, on November 14-16, 2023.