OTT on the up, but churn a serious problem

The number of OTT subs in key markets continues to increase at a healthy rate with an uptick expected over the upcoming Christmas period.

Half of the seasonal sign-ups will, however, churn, according new research.

Billing company Paywizard surveys consumers in six key international markets – Australia, Brazil, Germany, Singapore, the US and the UK – at key points of the year.

Ahead of Christmas the latest findings show that OTT operators can expect a subs surge as the festivities get underway.

Questions remain, however, on how long those new customers will stick with the OTT services.

It said that 30% of all consumers surveyed intend to subscribe to pay-OTT services ahead of Christmas and 18% of this group will be first-time customers.

“While Christmas 2016 looks strong for OTT operators, as the projected new subscriber figures (18%) added to those for existing customers (45%) would take the total percentage of subscribers to 63% after Christmas,” Paywizard said.

“However, the findings also reveal that 50% of those planning to take an OTT service for the first time this holiday season intend to cancel their subscription within six months.”

Over 6,000 consumers were quizzed and other key findings include that while Netflix and Amazon are driving the growth local services such as Foxtel Play in Australia, Maxdome in Germany and Now TV in the UK are taking a decent share of the new SVOD customers.

“There are definitely huge opportunities for OTT players to build on the momentum paid video-on-demand services are showing across all markets,”Bhavesh Vaghela, Paywizard’s CMO.

“Nonetheless, while OTT operators are poised for another huge lift this Christmas, it is clear that subscribers view these services as an activity they can dip in and out of. Keeping customers loyal is the major challenge facing providers. As OTT adoption nears the 60% range, operators need to address every point of the customer journey and work harder to keep new and old  subscribers alike.”