OTT Churn Rate Rises to 35 Percent

The churn rate among U.S. OTT services rose from 28 percent to 35 percent in 2019, according to Parks Associates.

Cost is the most important factor, with the need to cut household expenses cited as the number one reason for canceling a service. The second most important factor is not being able to find good content, followed by subscription rate increases, the end of a promotional period and opting for a “better alternative.” Other key considerations include not having time, wanting to try a variety of services and a platform removing desired shows.

Meanwhile, Parks Associates reports that churn among virtual MVPDs was 81 percent last year. However, over two-thirds of vMVPD subscribers said it would be 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,” said Steve Nason, research director at Parks Associates. “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.”