OTT Penetration Exceeds Three-Quarters of U.S. Broadband Homes

New research from Parks Associates has found that 76 percent of U.S. broadband households subscribed to an OTT video service in Q1 2020, while the churn rate for streaming services was 41 percent.

The OTT video research is from a survey of 10,000 U.S. broadband households fielded in March 2020. It also found that 62 percent of U.S. broadband households subscribed to a traditional pay-TV service.

“The entertainment industry, like all industries, faces an unprecedented situation as a result of the ongoing COVID-19 pandemic,” said Steve Nason, research director at Parks Associates. “With movie theaters closed and cinematic productions and live events cancelled or postponed, services are lacking some high-dollar content at the same time overall video consumption is accelerating. OTT services responded by adding new releases and extended free trials. As a result, OTT subscriptions have increased, while the churn has declined slightly since last year. But we will see, as lockdowns ease, if these strategies lead to sustainable growth or if the OTT industry needs to adjust again to new viewing patterns.”

“Of the 41 percent of households that trialed at least one OTT service, the majority (69 percent) adopted at least one paid subscription,” Nason said. “New trial offers can be successful in attracting new users, but as competition increases and household budgets shrink, providers will need to explore new service models, such as making a portion of content free or offering discounts to longer-commitment subscriptions.”