5 Main Reasons Subscribers Churn

(And What to do About it)

Churn is a fact of life for video streaming services, but it can be fatal for those that don’t get a handle on it. So, what are the main reasons for OTT churn, and how can platform data be used to tackle the problem?

Minimizing OTT churn is one of the most important considerations for anyone trying to run a robust SVOD service. Effective marketing and targeted promotions, or launching a major original series, can get subscribers through the door. But, retaining these customers is the difference between survival or failure of any streaming business.

OTT churn is nine-times higher than Pay-TV. As the number of cord-cutters swells and competition for the attention of these consumers intensifies, OTT service churn is increasing — from a rate of just under 30% at the beginning of 2018 to about 35% in the first quarter of 2019.

Churn doesn’t directly correlate with OTT subscriber growth. Q2 2020’s unprecedented circumstances have seen a surge in new sign-ups for OTT services across the board – especially given that many of the large SVOD providers have extended their free trial periods. But these subscribers are at greater risk of churning once lockdown lifts and other avenues of entertainment open up again unless steps are taken to keep their engagement high.

Who’s at risk of OTT churn?

Churn is not isolated to new subscribers, nor does it occur at any specific point during the subscriber lifecycle. It’s also amplified by today’s expansive SVOD market and is a complex issue that can’t be solved with extensive content libraries alone.

The traditional approach to combating churn relied heavily on surveys and feedback from users to uncover changes in subscriber sentiment. But these are lagging indicators that do not help identify subscribers that are at immediate risk of churning.

So, to better understand and predict churn, and know who’s at risk, you need to think more like a forensic investigator than an auditor, collecting and analyzing data to gain actionable insights into what subscribers are thinking and how they are likely to behave, even before they do.

What are the main drivers behind OTT churn?

In order to understand what strategies would be most effective to improve retention, it is essential to go beyond the standard definitions of ‘voluntary’ and ‘involuntary’ to understand the reasons for churn. These can broadly be divided into ‘engagement’ factors and ‘operational’ factors, both of which demand different types of responses from SVOD providers.

Engagement factors

  1. Perceived value in the content library (or nothing to watch syndrome): One of the most commonly cited reasons for subscribers churning out of a service. Yet this is entirely avoidable, given that even smaller niche platforms can have expansive content libraries. When subscribers say there is nothing to watch, what they really mean is that they cannot find what they are looking for in a sea of content. Services can combat this reason for OTT churn by taking a deep dive into the data around subscriber behavior and what content assets are holding their attention most. See our recent post on how to help your subscribers escape the recommendation echo chamber to find out more.
  2. Negative user experience: Given that multiple SVOD platforms often have access to the same titles, the user experience plays a crucial role in determining churn. Data-driven analytics is essential to optimizing the user experience, which is why players like Netflix use data science and analytics to do this with a laser focus. Understanding how users engage with the platform, for instance, can highlight experiences on different devices or how long it takes for them to find a video to watch, rather than relying on ‘shot-in-the-dark’ methods.
  3. Lack of engagement: As with any other type of relationship, lack of engagement is a primary reason for subscribers wanting to leave. By understanding your subscribers through data and usage trends and segmenting the experience to help increase the perception of personalization, it’s possible to not only make users feel like their voice is being heard but also help push them towards content they will love – and that the data shows is likely to make them stick around.

By using an insights dashboard such as the Wicket Scorecard, SVOD players can make informed, data-driven decisions. They enable SVOD providers to explore wickets that track subscriber preferences and engagement to accurately predict which of their subscribers are at the highest risk of churn. With these insights at their fingertips, it’s possible for SVOD businesses to make informed decisions into what will keep subscribers engaged and coming back for more. In turn, this will enhance retention rates, thereby increasing subscriber lifetime value and bolstering the bottom line.

This approach is best practice when a new subscriber signs up to a service to access an original content asset or are in the process of watching a content series they are coming to the end of. This is the point when it’s absolutely critical for SVOD providers to be using insights gleaned from their platform and user base to understand the value of their content and develop new content promotion funnels and other initiatives that will capture the attention of new subscribers immediately, making their service stickier than the competition.

Operational factors

  1. Billing / operational errors: Subscribers can churn if their credit card has expired or other system errors have crept in. This, too, is nuanced and different responses might work depending upon the context: there can be many reasons a payment method fails and identifying them is important for how you respond. For example, if the payment card is temporarily suspended, retrying after a set period will allow you to retain that customer without interrupting their experience, while lost or canceled cards necessitate a subscriber re-engagement strategy.
  2. Technical problems and cost: Buffering or delayed starts are one of the most significant operational causes for subscriber dissatisfaction. Equally, cost can be a stumbling block for long-term retention. However, both of these are intrinsically tied to the perceived value that a service brings, which brings us back why it is so important to have a deeper understanding of what makes your subscribers tick, gleaned from data insights.

SVOD players can to some extent counter these reasons for operational churn through improved engagement – if a consumer believed the service ticks all their other boxes, they will likely be willing to compromise on other aspects and be more likely to respond to remarketing. Particularly if that churn was involuntary following a billing issue, for example. An advanced insights dashboard such as the Wicket Scorecard not only provides the heartbeat metrics that can help SVOD providers do this but also forms the basis for the more nuanced engagement strategies outlined earlier.

Ultimately, in order to effectively combat OTT churn, it is important to not only look at top-level numbers but to analyze the reasons why this happens. Turning engagement and platform metrics into predictive insights allows SVOD services to take pre-emptive action in the battle to reduce churn.

And that’s precisely what the Wicket Scorecard allows you to do – look at your platform data through multiple dimensions, getting ‘under the hood’ of subscriber engagement to help uncover indicators for churn and the most effective methods for tackling it.

Understand and Combat Video Subscription Churn

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