A study from research organisation Parks Associates has revealed US consumers are cutting streaming services to save money, showing that the average annualised subscriber churn rate for streaming video services stands at 47%.
Parks noted that rapid changes in viewer behaviours, coupled with the ongoing Writers Guild of America (WGA) strike, have emphasised the content conundrum in today’s video services market. It added that a steady flow of scripted content is pivotal to viewer engagement, but it is costly and prone to disruption.
In a call to action, Parks said video service providers need to align content strategies with evolving viewer demands and greater emphasis on financial returns, which accounts for the recent rise of free ad-supported TV (FAST) and advertising-based video-on-demand (AVOD) services. The analyst emphasised Disney recently announced increases for premium Disney+ and Hulu subscription services, while offering ad-supported service bundles at highly discounted levels.
“Consumer focus on price and content underscores the pivotal role of value in consumer decision-making,” said Parks Associates research analyst Sarah Lee. “When high-quality content is absent, subscriber churn becomes inevitable, making content diversity a cornerstone of profitable growth, along with consideration of pricing.”
From the article, "Shifting demand in video services reveals growth strategies" by Joseph O'Halloran