The ease with which customers can trial, subscribe, and cancel OTT services brings new dynamics and challenges for content companies and service providers. Today’s consumers are well acquainted with online video and are comfortable trying many different streaming services. With a wide selection of streaming options that do not require long-term contracts, churn across OTT service providers is increasing, and services are struggling to retain and increase viewers. Major service providers are experimenting with hybrid business models to capture market share and expand user and revenue bases. Providers in more established OTT video markets want to expand worldwide and boost foreign offerings. As the streaming wars intensify, it is likely acquisitions and bundles of small services will become popular. Market Shifts, Direct-to-Consumer (DTC), and Intense Competition
Defining Churn and Hopping
Service hoppers are OTT subscribers who frequently switch between services and re-subscribe to services multiple times. These customers tend to stay with services for a shorter time, have more subscriptions at a time, and have canceled more services than other subscribers over the previous 12 months. Currently, 36% of OTT subscribers (32 million households) are “service hoppers.”
As of 2022, 44% of subscribers reported canceling a service.
Parks Associates calculates video service churn by comparing the percentage of households that report canceling a video service in the prior 12 months with the current reported service adoption rate.
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