OTT churn down in US as pandemic accelerates vMVPD adoption

The churn rate for OTT services in the US is down, according to a new study.

According to figures from Parks Associates, OTT churn for Q3 2020 was at 38%, down from 46% in Q3 2019. This represents subscribers who have cancelled a service as a percentage of the current subscriber base.

vMVPDs, which typically have had a higher churn due to their more expensive products, have performed markedly better, dramatically cutting churn from 84% in 2019 to 49% in 2020.

Parks Associates research director Steve Nason said: “Households across the US continue to be primarily homebound or more homebound than they have been in prior ‘normal times. 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.”

Looking at individual streamers, the top three players – Netflix, Amazon and Hulu – all have churn rates lower than the overall average in the country.

Of the newer players, Disney+’s churn rate is at 13%, and HBO Max, Apple TV+, and Peacock have churn rates at around 20%.

Both figures represent a country which is increasingly turning away from traditional pay TV services and cutting the chord. The report notes that the reduction in vMVPD churn and its growth over the past year has been accelerated by the Covid-19 pandemic.

Nason said: “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 said. “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.”