Viewers tend to cancel their online OTT subscription after purchasing it to watch their favorite show. This trend, also called subscription churn, is harming several top OTT Platforms including Hotstar, Prime Video, and Netflix.
Several top founders and CEO have strong opinions on this harming trend. The percentage of users of OTT services that cancel or let their subscriptions expire is known as the churn rate. While 20–25% churn is often acceptable, smaller platforms with 40–50% churn pose a serious threat to the OTT business.
Additionally, as consumer behavior indicates that users are hesitant to pay in advance, these trends demonstrate how individuals favor short-term subscriptions over premium platforms. Nevertheless, churn rates are typically lower on platforms with vast, diverse material giving users more to choose from.
Several OTT services release content in a drip format to buck this trend, dividing a single season into two halves or releasing one episode per week. By preventing viewers from binge-watching the full season at once, this strategy hopes to keep users returning to the platform to catch the next episode.
Nonetheless, several elements may be required to address this circumstance. It’s important to have competitive pricing, reliable content, and high-quality apps with cutting-edge features. As a result of easy online payments, people are more likely to gravitate toward the best platforms based on the content they want to view.
Numerous platforms have addressed this issue by launching monthly packs first, followed by three-month, six-month, and annual packs. For customers on a tight budget, they also unveiled a low-value pack. To have maximum attention, these platforms need to work on each aspect of their product and provide the most optimum experience to decrease churn rates.