OTT Churn Rises As Consumers Switch And Sample

Lest pay-TV providers start thinking that their hotshot over-the-top rivals have it all, consider this latest tidbit: OTT video services are dealing with churn, too. Big-time.

About 85% of U.S. broadband households subscribe to an OTT service, and in the last year about 4% of U.S. broadband homes pulled the plug on Netflix, comprising 9% of the Netflix customer base. Meanwhile, a massive 7% of broadband homes nixed Hulu Plus in the last year, wiping away about half of its subscriber base, according to Parks Associates, which produced the research report on churn.

The higher churn rate for other services is likely occurring as Netflix customers dabble in options purely for sampling purposes, suggesting that many of the lost subscribers were unlikely to ever become ongoing customers in the first place. In fact, sampling may become the new normal for this segment of video viewing, as consumers move in and out of OTT services depending on content offerings.

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