September 5, 2018
The rate of cancellations for OTT video services among U.S. broadband households has held steady over the past three years at approximately 18%, according to research from Parks Associates.
The average subscription length for OTT video services is 30 months overall, although the three top services in the market — Netflix, Amazon, and Hulu — have the most stability, while churn rates for other services tend to be more volatile, according to Parks.
“With OTT service penetration starting to plateau at around 65% adoption among U.S. broadband households, the OTT video market is reaching a level of saturation for the services currently available to consumers,” said Parks research analyst Hunter Sappington in a statement. “In an increasingly crowded and competitive marketplace where subscriber acquisition costs are high, this plateau highlights the need for services to focus on retention rather than solely acquisition. Successful services can encourage retention in several ways, such as community building, continuously offering new and fresh content, and improving their user experience.”
More than 85% of U.S. millennials subscribe to at least one OTT video service, and by 2022, more than 265 million households worldwide will have more than 400 million OTT video service subscriptions, according to Parks.
Parks will examine subscriber churn in the OTT video service landscape in the industry webcast “OTT Churn and Retention: Increasing Lifetime Subscriber Value” Sept. 6, 11 a.m. CT. The webcast is sponsored by Swrve.