Even though during the Covid-19 crisis, more than two in five US broadband households have trialled an over-the-top service, and 8% of households have tested four or more, research from Parks Associates has found the churn rate for OTT has increased from 35% in Q1 2019 to 41% in Q1 2020.
The analyst said that it was are seeing a record number of consumers experiment with new OTT services as a result of not just the Covid-19 crisis but also the shifts in strategy in the industry. It noted that OTT services were offering extended free trials to build up engagement, and 8% of US broadband households report they have subscribed to at least one new OTT service since the Covid-19 crisis began.Among the new subscribers, 49% took to Disney+ and 27% subscribed to Apple TV+, so conditions created by the crisis helped these services quickly increase their subscriber base. Yet Parks suggested that a key question going forward is whether subscribers will keep these services as fewer households shelter-in-place. It added that a significant challenge, especially for services relying on original programming, was delivering new content since production on many series has halted.
“The industry is working on new hybrid content strategies as a result of production halts,” said Steve Nason, research director, Parks Associates.
“Major players like AT&T for Warner Brothers and Comcast for Universal Studios are greatly concerned about the delays in content production on the launches of new services, like HBO Max and Peacock. Free trials will bring in new subscribers at the launch, and roughly seven in ten have subscribed to at least one OTT service they have trialled. OTT services need to be creative in building an engaging service, but during this time of heavy video consumption, OTT services have the opportunity like never before to win over new video consumers and retain them as long-term subscribers.”
