Streaming is heading toward a breaking point with consumers

As streaming video continues to exert its dominance over entertainment and the major players fight for share, consumers are becoming increasingly frustrated.

Media analyst company Interpret recently published its The Future of OTT Aggregation study and found U.S. viewers subscribe to an average of four to five SVOD services, with many throwing ad-supported services like Pluto TV and Tubi into the mix. Out of the 9,000 respondents, 20% agreed that they “subscribe to too many video streaming services.”

Interpret suggests that one-third of respondents are hoping for a way to manage and search for all available content from one place. It’s the kind of aggregation platform that companies like Amazon, Apple, Roku, Comcast, Redbox, MyBundle.TV, Verizon and more have been trying to perfect.

“Addressing fragmentation will be tricky since there are so many service options, each with its own priorities relative to revenues, data, and audience. Yet, the companies that solve the aggregation puzzle have much to gain,” said Brett Sappington, vice president at Interpret. “Successful aggregation of content and services will produce an improved, sticky customer experience and will drive subscription and ad revenue opportunities. It will also be important to mid-sized or smaller streaming services that cannot afford to out-market global or regional streaming giants.”

However, while work on that puzzle continues and multiple companies look for a way to get streaming subscribers to stay in one place, customer churn is still high. Or, as Parks Associates describes it, “service hopping” is still popular among streaming video consumers. New data from the company suggests 36% of OTT subscribers, or approximately 32 million U.S. households, are service hoppers" which the company defines as OTT subscribers who have switched between services and resubscribed to services multiple times in the previous 12 months.

Parks suggested that data and analysis is the key to boosting customer retention.

“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. Advanced data tools help companies make more informed decisions about the content and structure of their services and special offerings," said Elizabeth Parks, president and chief marketing officer at Parks Associates.

The most important streaming data often comes from direct customer relationships, which is a big reason why major SVODs like Netflix, Disney+ and HBO Max are not available through Amazon Prime Video Channels, a platform that boosts distribution but adds a middle man. But Parks said as the streaming market have matured, OTT providers are seeing fewer subscribers sign up directly through their websites. The firm found the percentage of households subscribing directly via an OTT provider's website declined from 41% to 29% between the first quarter of 2020 and third quarter of 2021.

“Instead, households are taking multiple paths to video subscription, including through OTT aggregators,” the company wrote in a news release.

Interpret believes streaming media players, gaming consoles, set-top boxes and smart TV interfaces already represent multiple potential aggregators in many current homes. Sappington said that most aggregation providers are focused on front-end content interfaces and discovery tools but noted there is potential to offer significant differentiation through portfolio and payment management tools.

However, “content providers are hampering progress in aggregation because they are fighting to retain control over their own parts of the content journey (and related data collection and advertising opportunities),” he said.

At some point, though, if customers keep service hopping or just permanently canceling because they feel overwhelmed, SVODs may need to team up more with distributors and each other.