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Churn Rates for Subscription OTT Services Hit 20% in the Back Half of 2020

Leaky Bucket
(Image credit: Chaotic-flow)

Cancellation rates for U.S. subscription streaming video services increased from 15% - 20% in the second half of 2020, with consumers actively playing the field amid a surfeit of new service choices, according to a new report compiled by former Parks Associates analyst Brett Sappington, now flying the flag for Interpret as VP of research. 

Interpret’s Video Churn Today: Trends, Changes and Outlook 2021 report said that the amount of consumers signing up for subscription streaming increased by 14% over the last six months of the quarantined 2020 calendar year. 

But with these subscribers able to sign up, cancel, and sign up again, immediately and with no transaction costs, only 20% of streaming subscribers are content with their current alignment of providers. 

Notably, over the same six-month period, pay TV churn was only up two points to 7%.

Nearly 20% of OTT subscribers reported switching among services to watch platform exclusives, and 13% reported cancelling a service after watching a selected video series.

“Subscriber churn was a concern for many video service providers prior to the pandemic, particularly for pay TV,” Sappington said. The interruption in content, household income, and viewing behavior, along with heightened competition, has led to changes in how consumers value and evaluate video offerings. Users now realize that they can’t get all of their preferred content in one place. The industry is essentially training consumers to be churn tolerant. So, the question for the future is less about how to stop churn, and more about how to make churn work in your favor.”