• by Karlene Lukovitz  @KLmarketdaily, April 1, 2022

In the past 12 months, about 36% of all U.S. subscribers to over-the-top (OTT) video services — some 32 million households — have switched among services, re-subscribing to some multiple times, according to Parks Associates' consumer data.

These “service hoppers” undermine streaming providers’ profitability, but can be difficult to identify because increasing numbers of consumers are subscribing through OTT aggregators and other non-direct paths.

That, in turn, is driving some streaming service operators to re-establish control over their data by doubling down on direct subscriber acquisitions and reducing reliance on aggregators.

“In 2021, a substantial group of OTT households subscribed to an OTT service via Amazon Prime Video Channels, but that percentage could drop in the future, as HBO and HBO Max were removed from Amazon Prime Video Channels in September,” Parks points out in a new report on data-based decision-making for video services. “Likewise, Disney+ is not available through major aggregators, and NBC recently announced it is moving many of its shows exclusively to Peacock and away from Hulu.”  

The data collection and analysis enabled by DTC subscriber acquisition is critical to optimizing acquisition and retention and profitability, says Parks President and CMO Elizabeth Parks.

“Data allows vendors to identify subscribers at risk of churn and can even tag the ‘server hoppers’ who will jump in and out of services no matter what, so that providers do not waste resources chasing them in vain,” she says. “Advanced data tools help companies make more informed decisions about the content and structure of their services and special offerings.”

Parks data, based on consumer surveys, indicates that the average streaming service subscriber churn rate declined somewhat during 2020, the pandemic’s first year, but was back up to about 50% by last year’s third quarter.

However, reports based on actual transactions, such as those from Antenna, have put voluntary churn rates (excluding involuntary cancels due to factors such as credit card expirations/declines) in the single digits. According to Antenna, the weighted average active monthly churn rate for 10 leading  subscription video-on-demand services was 6% in October 2021 — up by just a half of a percentage point from October 2020’s 5.5%, and 2 percentage points from October 2019’s 4.1%.

Churn is generally calculated by dividing the total number of cancels in a month by the number of customers that existed as of the last day of the previous period/month.