US streaming churn rates fall sharply over 2020
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Joseph O'Halloran
| 09 December 2020
Driven by Covid-19, 2020 has truly been the year of online video and streaming and not only have consumers picked up services, they have not put them down says research from Parks Associates.
Parke OTT churn 9Dec2020
The research found that the overall annual churn rate for OTT services, representing those subscribers who have cancelled a service as a percentage of the current subscriber base, dropped from 46% in 3Q 2019 to 38% in 3Q 2020. As a subset of subscription-based OTT services, vMVPDs experienced an even more dramatic drop, from 84% in 2019 to 49% in 2020.

“Households across the US continue to be primarily homebound or more homebound than they have been in prior ‘normal times,’” observed Parks Associates research director Steve Nason. “They have much more time and opportunity to engage and interact with OTT services and are deciding to stick with services, including midsized and smaller ones, longer than normal. Consequently, we are seeing a lower overall churn rate for OTT services.”

The Parks research also found that churn was less of a problem for those challenging the traditional Big Three of Netflix, Amazon Prime Video and Hulu. The study revealed that such challengers, led by the new direct-to-consumer players, experiencing churn rates considerably lower than the overall average for all OTT services. Disney+’s churn rate was measured at 13%, while HBO Max, Apple TV+ and Peacock reported churn rates at around 20%. For vMVPDs, Parks recorded churn rates as still high but added that Covid-19 has accelerated the migration away from traditional pay-TV services via a cable or satellite provider while also encouraging extended subscriptions.

“vMVPDs, online pay-TV services that offer bundles of live channels, are a direct beneficiary of the move away from traditional pay-TV services,” Nason concluded regarding the OTT research. “This trend, along with the return of live sports, is a huge growth accelerant for vMVPDs such as YouTube TV, Hulu with Live TV and fuboTV. As a result, the churn rate for vMVPDs, while still hovering near 50%, has been significantly reduced in this latest release.”