DALLAS—In a recently released analysis and survey of the video services landscape, Parks Associates is providing some alarming numbers on how quickly consumers are switching and canceling streaming services. The research shows the average annualized subscriber churn rate for streaming video services now stands at 47%.
The top driver of service cancellations is the desire to save money – 29% of Internet households say they cancel a service to save money. Finishing a show is the next most popular reason.
Other popular reasons also included economic factors. The ending of a promotion price was the fourth most cited reason for canceling and price hikes were number five.
"Consumer focus on price and content underscores the pivotal role of value in consumer decision-making," said Sarah Lee, research analyst, Parks Associates. "When high-quality content is absent, subscriber churn becomes inevitable, making content diversity a cornerstone of profitable growth, along with consideration of pricing."
Rapid changes in viewer behaviors, coupled with the ongoing Writers Guild of America (WGA) strike, emphasize the content conundrum in today's video services market, the researchers said.
The study also noted that a steady flow of scripted content is pivotal to viewer engagement, but it is costly and prone to disruption. 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. Disney recently announced increases for premium Disney+ and Hulu subscription services, while offering ad-supported service bundles at highly discounted levels.
"Video Services: Shifting Demand," research 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 and provides insights into retaining subscribers and boosting revenue
Parks Associates will feature this research along with executive insight on industry trends the at the sixth annual Future of Video, hosted at the Marina del Rey Marriott in Marina del Rey, CA, on November 14-16, 2023.
