Parks Associates says SVOD churn rates rose in 2019

TV watching
Parks Associates’ consumer data suggested that churn among virtual multichannel video programming distributors or online pay TV providers was 81% in 2019. (StockSnap/CCO)

The rate of churn for subscription streaming video services reached 35% (up 25% annually) in 2019, according to research firm Parks Associates.

Parks, along with Swrve and Cinedigm, collected data on what is causing the elevated churn levels. Among U.S. broadband households that canceled at least one OTT service in the past 12 months, a need to cut household expenses was the most common reason. Not being able to find content to watch, raised prices and end of promotional pricing were among the other most cited reasons.

Somewhat surprisingly – given how concerns about elevated churn for Netflix rose as licensed content like “Friends” was being pulled from the service – only about 10% of respondents said that services losing programs they liked was a key factor in their decisions to churn.

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Parks Associates’ consumer data suggested that churn among virtual multichannel video programming distributors or online pay TV providers was 81% in 2019. However, more than two-thirds of vMVPD subscribers said they would find it difficult to give up at least one of their current subscriptions, so providers that offer the right mix of content, personalization and ease of use can secure loyal subscribers.

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“Overcoming high churn and driving engagement are notable challenges for video service providers, especially as the market becomes more saturated and penetration rates slow,” said Steve Nason, research director at Parks Associates, in a statement. “OTT services are offering free trials and promotional offers to drive initial service uptake, but these tactics are also leading to sky-high churn rates. To secure long-term subscriber fidelity, providers need to offer more, including original content and a personalized user experience.”

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