DTVE Data Weekly: Capitalising on churn

Video subscription service churn has long been considered detrimental to the industry, with service owners lamenting lost revenue from the theoretically infinite chain of monthly payments. This revenue loss is obvious to the churned video service, but it does not necessarily mean that these consumers are not valuable to the industry as a whole. In fact, these consumers are among the most valuable media customers, taking many more services and using them much more frequently than non-churners.

Churning habits are symptomatic of heightened engagement with content and mean that these people are an opportune market for new and better media services.

According to the Omdia Consumer Research survey, 2024 is on track to be the year where more than half of sampled consumers across eight global markets will identify as having churned from at least one of their subscription video services in some way in the preceding 12 months.

These churn types include:

• Canceling a video subscription and not resubscribing (churners)
• Canceling but then resubscribing to the same service in the same 12-month period (resubscribers)
• Utilizing a free trial or promotional offer only for a service (free trialists)
• Downgrading a video subscription to a less expensive tier (downgraders)

Consumers may fall into multiple of these categories depending on how many subscription services they have interacted with, although only approximately one-third of any group of churners will fall into one specific other group on average. When considering their media and entertainment consumption habits and subsequent consumer profiles, each of these churn groups displays varying levels of heightened engagement with other platforms.

Omdia Consumer Research suggests that of all the churner groups, resubscribers display particularly elevated levels of engagement with media.

On average, resubscribers are 30% more likely to be cinema goers and sports fans and more than 70% more likely to be users of transactional video, including premium rental and retail formats and FAST video services. They are also two-thirds more likely to partake in video content piracy, yet another shadowy segment of the video industry that is indicative of heightened engagement with media content.

Free trialists and downgraders also show significantly above-average levels of engagement, trailing only marginally behind resubscribers, depending on the metric.

Churners, on the other hand, only display marginally heightened engagement levels compared to generic subscription video service owners. Nevertheless, this churn group also indicates ongoing engagement with video services, with approximately 40% of churners indicating that they have added a new subscription video service in the same 12-month period.

Max Signorelli is Omdia’s Media & Entertainment Principal Analyst. Read the full report here.