A famous term in cable television is ‘churn’, the attrition rate at which customers switch their subscriptions over a specific period. Basically it’s often presented as the % of a service’s subscribers who discontinued their subscription with that service in a quarter or a year.
The term is also being increasingly used when it comes to subscription video-on-demand services where a report by research firm Parks Associates today has revealed the amount of churn in this sector is on the rise – up to 41% during the first quarter of 2020 from 35% in the same period of 2019.
Steve Nason, research director at Parks Associates says: “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. OTT services are offering extended free trials to build up engagement, and 8% of U.S. broadband households report they have subscribed to at least one new OTT service since the COVID-19 crisis began.”
Among those new subscribers, 49% subscribed to Disney+ and 27% subscribed to Apple TV+. Larger and more well-established services like Netflix, Amazon Prime Video, and Hulu have the lowest churn rates – they’re been around for a decade and are often deemed more essential.
Where churn is really firing up is not just in the more newly launched services like Disney+, Apple TV+ and HBO Max, but also among ‘skinny bundles’ like Sling TV, YouTubeTV and Hulu with Live TV where costs are higher and content is more uniform.
The study indicates roughly seven in ten have subscribed to at least one service they have trialed, so people are liking what they see.
Source: Deadline
