December 17, 2020
Despite recent cutbacks, most subscription streaming video platforms allow new consumers a free trial period from seven to 14 days. New data from Parks Associates finds that about 40% of U.S. broadband homes trialed at least one OTT service during the COVID-19 crisis and nearly 70% of these households ended up subscribing.
“The use of free trials, promotional offers and bundled packages has accelerated through the first part of 2020, during the initial stage of the COVID crisis,” research director Steve Nason said in a statement.
Parks found that domestic broadband households spent an average of $16 per month on OTT video service subscriptions in Q1 2020, based on consumer-reported spending. The overall OTT churn rate hovers around 40%.
“The conversion of those trials to paid subscriptions has also increased, but to keep those subscribers long term, providers need to deliver a continually evolving and personalized experience,” Nason said.
The analyst said the data gained from trial user habits and actions offer OTT video service providers an opportunity to engage potential subscribers through every phase of their exploration of the service.
“Companies that effectively integrate smart data are leading the battle to engage the ever-elusive digital media and entertainment consumer,” Nason said. “The overall OTT churn rate has dipped some, but if the economic impacts from COVID-19 pandemic linger, households will continue to scrutinize their spending in entertainment services and determine which ones to keep and which ones to cancel. Smart data usage can give an advantage to a provider in keeping their service at the top of a household’s entertainment equation.”