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Research: Churn hitting SVoDs

June 9, 2021

According to research by analyst firm Interpret, only 20 per cent of streaming subscribers are content to stay with their current providers. The aggressive marketing of new streaming services is providing consumers with more incentive to cut the pay-TV cord and sign up for new services, but subscriber churn has become an increasing problem for streaming service providers.

According to Interpret’s Video Churn Today: Trends, Changes and Outlook 2021 report, SVoD subscribers increased by 14 per cent in the second half of 2020. During the same period, the rate of cancellation increased to 20 per cent from 15 per cent – signalling that churn is not unique to pay-TV providers. Pay-TV providers saw churn increase 2 points to 7 per cent during the second half of the year.

“Subscriber churn was a concern for many video service providers prior to the pandemic, particularly for pay-TV,” advises Brett Sappington, VP of Research at Interpret. “The interruption in content, household income, and viewing behaviour, along with heightened competition, has led to changes in how consumers value and evaluate video offerings. Users now realise 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 favour.”

According to the Interpret report, consumers who subscribe to multiple SVoD services also have a willingness to watch ad-supported streaming (AVoD) services, providing ad agencies growing inventory on streaming outlets. Consumers, moreover, are actively taking advantage of trials without subscribing, and adding and dropping services on an increasing basis. Nearly 20 per cent of subscribers report switching among services to watch platform exclusives, and 13 per cent report cancelling a service after watching a selected video series.

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