OTT consumer research firm finds churn rate for OTT services was 41% in Q1 2020
New research from Parks Associates‘ OTT video research, from a survey of 10,000 US broadband households fielded in March 2020, finds that 76% of US broadband households subscribed to an OTT video service in Q1 2020, while the churn rate for streaming services was 41%. Sixty-two percent of US 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, 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.”
Nason will examine the future of streaming services in the webinar “Streaming in the 2020s – An Industry Comes of Age,” cohosted with Comcast on Tuesday, June 9, 11:00 A.M. CT (12:00 P.M. ET). In this webinar, speakers will look beyond the current moment to determine new strategies and innovations will ensure continued growth and viewer engagement.
“Of the 41% of households that trialed at least one OTT service, the majority (69%) 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.”
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Parks Associates’ Consumer Perception of OTT Video examines the positives and negatives of the top OTT video services and their libraries and features from the consumer point of view. The firm’s landmark service OTT Video Market Tracker features monthly updates on trends and market activities in the OTT video space, with comprehensive tracking of the OTT video services industry, identification and analysis of new OTT video service players, and insights into industry trends and disruption.
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