The Wall Street Journal (WSJ) reported on the 2nd that more and more Americans are canceling their OTT membership.
The Wall Street Journal cited the case of Crystal Levis, a mother of six who lives in Lynn Haven, Florida. Levis recently canceled her subscription to Disney Plus and Paramount Plus, two of its online video services. The service fee has gone up, and other living expenses are higher than before. Levis is considering stopping watching Netflix.
Customer churn across premium streaming services stood at 6.3 percent in November last year, up from 5.1 percent a year ago. According to ANTENNA, an OTT subscriber analysis company, about a quarter of major OTT subscribers, including Netflix, Apple TV Plus, and Hulu, have cut at least three services in the past two years. Two years ago, the figure stood at 15 percent.
Businesses are on alert when subscribers cancel their subscriptions. Companies are attempting a variety of customer retention and attraction strategies, such as launching inexpensive services that contain advertisements, engaging in bundle transactions in cooperation with competitors, or providing discounts or free service periods.
The Wall Street Journal reported that Levis also planned to cancel Hulu`s viewing, but changed its mind when the company decided to provide the advertised service for six months at 2.99 U.S. dollars per month. This is less than half of the original subscription fee. Some users are switching to a cheaper service.
On the other hand, the antenna explained that many customers who stopped using the service return to the service. One out of four people who cancel the premium streaming service generally rejoin the service within four months. One out of three people also rejoin the service within seven months, and half rejoin the service within two years.
Jonathan Carson, CEO of Antenna, told the WSJ that service providers need to be more sophisticated in order to regain customers. For example, they target audience advertisements or marketing activities at certain times of the year.
Instead of being advertised, companies are attracting new customers through cheaper services or reacquiring customers who have previously canceled their subscription but are willing to pay less.
Among U.S. customers who joined Disney Plus for the first time in November last year or became a regular subscriber after temporary use, 60 percent chose the service with advertisements. In the same month, more than a third of Netflix’s new customers chose the service with advertisements. This is a significant increase from 11 percent a year ago when the service was launched.
More and more competitors are selling services in a lump sum. Disney said customers are less likely to cancel their subscription if they use the service that combines Disney Plus, ESPN Plus and Hulu.
SALLY
ASIA JOURNAL
