Shifting demand in video services reveals growth strategies | Media Analysis | Business | News | Rapid TV News
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A study from research organisation Parks Associates has revealed US consumers are cutting streaming services to save money, showing that the average annualised subscriber churn rate for streaming video services stands at 47%.
Parks Chart PA OTT Churn Triggers 590 23Aug2023
The study, Video Services: Shifting Demand, was based on a survey of 10,000 US internet households, investigates the dynamics of traditional pay-TV, streaming TV, and OTT services, dissecting subscription, ad-based, and transactional business models. It explored what consumers value most in their entertainment services and what is effective in keeping them, examining historical data on adoption, satisfaction, and churn rates for pay-TV and OTT services, uncovering strategies to retain subscribers and enhance revenue streams.

The data showed that the leading driver of service cancellations was the desire to save money. 29% of Internet households say they cancel a service to save money. Finishing a show was the next most popular reason.

Parks noted that rapid changes in viewer behaviours, coupled with the ongoing Writers Guild of America (WGA) strike, have emphasised the content conundrum in today’s video services market. It added that a steady flow of scripted content is pivotal to viewer engagement, but it is costly and prone to disruption.

In a call to action, Parks said video service providers need to align content strategies with evolving viewer demands and greater emphasis on financial returns, which accounts for the recent rise of free ad-supported TV (FAST) and advertising-based video-on-demand (AVOD) services. The analyst emphasised Disney recently announced increases for premium Disney+ and Hulu subscription services, while offering ad-supported service bundles at highly discounted levels.

“Consumer focus on price and content underscores the pivotal role of value in consumer decision-making,” said Parks Associates research analyst Sarah Lee. “When high-quality content is absent, subscriber churn becomes inevitable, making content diversity a cornerstone of profitable growth, along with consideration of pricing.”