TV Viewers Sample Different OTT-CTV Platforms: Churn, Baby, Churn!

Stay-at-home viewing -- OTT and/or connected TV or otherwise -- has grown. At the same time, “churn” is also higher. This would seem to work at different ends of the business.

“Churn” -- subscribers cancelling service as a percentage of the overall customer base -- has been growing, according to Parks Associates. In the first quarter, OTT services rose to 41% from 35% in the first quarter of 2019.

Either number would sound high when compared to historical “churn” numbers in looking at premium cable TV networks, like HBO and Showtime. 

For decades, consumers have come in and out of those networks when buying via pay TV services -- cable, satellite and telco. Those premium network’s churn rates have been in the low-single-digit percentages for sometime.

But in the direct-to-consumer world, where there is almost a standard when it comes to the online ease of cancelling one’s subscription, numbers are higher. Additionally, streaming premium video services are a new thing -- so there is a lot of experimentation.



Now the OTT viewing dynamic: In May, Nielsen said there continued to be around 3.5 billion hours of connected TV usage per week. Though slightly dipping for earlier weeks, overall, this is still significantly higher than a year ago.

Much of this is due to stay-at-home orders, as well as a rising number of new premium services, many of which offer long-term, year-long free promotional offers, including from Disney+ and Apple TV+.

Recent churn issues could be a factor in consumers abandoning older premium video services and signing to new platforms. Also, in the new business’ favor, the growing numbers of multi-streamer services in homes.

Somewhat related is all that cord-cutting data: Legacy pay TV services have seen much higher, more permanent declines in subscribers, for cable, satellite, or telco monthly packages. 

MoffettNathanson Research estimates the fourth quarter of this year to see nearly an 8% decline in subscribers for all their pay TV businesses -- including new virtual pay TV businesses. 

A shakeout in the streaming business is coming -- but probably not anytime soon. It won’t be clear until all major TV/media companies have full, active streaming video operations.

Even then, many analysts point to the end of December at the earliest, when those new year-long promotions finish. Then see who churns -- and who earns.

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