The customer churn rate for OTT services reached 35% in 2019, a 25% acceleration over 2018, according to research released today by Parks Associates.
Churn rate is a measurement of how much of the customer base quits and starts a service over a designated period of time. Parks found that churn was particularly high among virtual MVPD services, measuring 81% in 2019.
“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,” said Steve Nason, research director for Parks.
“To secure long-term subscriber fidelity, providers need to offer more, including original content and a personalized user experience,” he added.
Notably, Parks found that economic imperative was the No. 1 driver of OTT customer churn, with the need to cut household expenses listed as the reason more than 30% of OTT customers quit a service. “Couldn’t find programs to watch” was the second biggest reason.