• by Wayne Friedman , Staff Writer, March 4, 2020

As premium video-streaming services grow, non-advertising and ad-supported, attention will focus on key “churn” rates -- defined as the rate of subscribers lost as a percentage of the subscriber base.

Somewhat helpful in keeping low churn is the ease of cancellation -- where a simple click on a service’s app/platform does the trick. Returning to these services is equally easy.

Many analysts say this gives consumers what they want: flexibility. Allowing customers to happily leave builds “trust,” “loyalty” and, going forward, a better chance for customers to return.

Many non-video subscriptions of consumer products haven’t followed this approach. Until recently, some well-known consumer product subscription services insists consumer make a phone call to cancel. 

This included, for example, The Honest Company, the food product company fronted by actor Jessica Alba, and Harry’s razors -- which has shifted to easier digital click changes.

And we know why some old-thinking services still retain these practices -- a slow manual process dissuades consumers from leaving. At worst, it gives the customer-service representative a chance to change their minds.

Still, premium video streaming providers have other issues when it comes to keeping consumers: pricing.

Netflix, the premium video streaming leader, for most of its U.S. subscribers, is priced at $12.99 a month, perhaps the most expensive for a broad-based premium TV streamer. That's compared to Disney+ at $6.99/month or Apple TV+ at $4.99/month plan.

And what about other streamers, such as ad-supported streaming services in a mature digital TV world? Right now, CBS All Access, for one, says things are pretty good.

Responding to a question from MediaPost at the Television Critics Association meeting in January, Marc DeBevoise, Chief Digital Officer of ViacomCBS/CEO-president of CBS Interactive, said CBS All Access’ “churn”  is low, around a “single-digits” percentage, a number typical for a traditional premium cable TV network.

Decades ago, cable networks and cable TV providers could deal with this low single-digit percentage churn rate -- especially as there was overall growth with net subscribers. Not now. Annual subscriber losses of 3% for many cable and other TV networks are the new normal.

So are we just substituting one unstable world for another to come?

Where will churn be when all the major media companies see a meaningful share -- says 40% to 50% of their business moving online into the OTT/CTV space?

Churn up the noise. Ear plugs optional.