OTT Churn Rate Rises to 41 Percent

The churn rate among OTT services in the U.S. rose from 35 percent in Q1 2019 to 41 percent in Q1 2020, according to Parks Associates.

The research firm also found that 8 percent of U.S. broadband homes trialed four or more OTT services during the COVID-19 crisis.

“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 Steve Nason, research director at Parks Associates. “OTT services are offering extended free trials to build up engagement, and 8 percent of US broadband households report they have subscribed to at least one new OTT service since the COVID-19 crisis began.”

Of those who signed up for a new SVOD service, 49 percent opted for Disney+ and 27 percent for Apple TV. It remains to be seen of these new subscribers will keep those services as stay-at-home measures ease. Platforms themselves face a challenge of delivering content with production still largely on hold.

“The industry is working on new hybrid content strategies as a result of production halts,” Nason said. “Major players like AT&T for Warner Bros. and Comcast for Universal Studios are greatly concerned about the delays in content production on the launches of new services, like HBO Max and Peacock. Free trials will bring in new subscribers at the launch, and roughly seven in ten have subscribed to at least one OTT service they have trialed. OTT services need to be creative in building an engaging service, but during this time of heavy video consumption, OTT services have the opportunity like never before to win over new video consumers and retain them as long-term subscribers.”