The U.S. Federal Trade Commission (FTC) has introduced a “click to cancel” rule that can totally change the way OTT platforms like Netflix and Disney+, operate.
This new rule ensures that cancelling a subscription is as easy as signing up, which could lead to a drop in OTT platform growth.
Just imagine. How many times did you consider cancelling the subscription? But did you?
Probably not. Because these OTT platforms are designed in a way that people don’t cancel the subscription. You see, these apps don’t publish the subscription cancellation button and as a result, the idea of cancelling a subscription doesn’t strike our brain.
On the other hand, they ensure that signing up for a streaming service is as easy as a cakewalk.
All the companies have made signing up for services quick and easy while cancelling is a frustrating process with hurdles like talking to chatbots or agents.
Under the new rule, if you sign up online, you must be able to cancel online, with no extra steps.
This change will certainly impact OTT platforms, which rely heavily on subscriptions. Many users forget to cancel services they no longer use or find it difficult to do so, leading to recurring payments.
With the new rule, cancellations will increase as users can easily drop services they no longer want.
While this is a win for consumers, it could hurt businesses, especially those offering free trials that convert into paid memberships.
In the long run, this rule will likely slow the growth of OTT platforms. But, we welcome this step.
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