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Netflix champions U.S. OTT

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The latest OTT data from research and consultancy firm Parks Associates indicate that at the end of 2015, approximately 20 per cent of U.S. broadband households had cancelled at least one OTT video service in the past 12 months. In the second half of 2015, 18 per cent had done so.

Netflix is still the OTT leader in the U.S., with 52 per cent of all U.S. broadband households subscribing to the service at the end of 2015. Netflix also had the lowest churn rate as a percentage of its total subscriber base. In the past 12 months, 5 per cent of U.S. broadband households cancelled their Netflix account, including those who cancelled at the end of the trial period. That figure represents 9 per cent of the company’s current subscriber base.

Five percent of U.S. broadband households indicated that they had unsubscribed from Amazon’s Prime Video service in 2015, a figure that represents 19 per cent of those who claim to be current subscribers to Amazon Prime Video. Seven percent of U.S. broadband households cancelled a Hulu subscription in 2015, representing approximately half of Hulu’s current subscriber base.

Research from Parks Associates’ OTT Video Market Tracker shows:

  • 5 per cent of U.S. broadband households cancelled Netflix in 2015, up from 4 per cent of households reporting in Q2 of 2015 that they cancelled the service in the past 12 months.
  • 14 per cent of U.S. broadband households subscribe to Hulu, and 7 per cent of U.S. broadband households cancelled the service in 2015, roughly the same churn rate from Q2 of 2015.
  • 24 per cent of U.S. broadband households report having a subscription to Amazon so that they can stream video. The churn rate for Amazon’s video service declined slightly from Q2 of 2015 to the end of the year.

“Several factors contribute to OTT video service churn by consumers,” advised Brett Sappington, Senior Director of Research, Parks Associates. “In some instances, consumers are experimenting with new services, trying a service and cancelling before the trial period ends or within a few months. Popular shows or events, such as HBO’s Game of Thrones or WWE Network’s Wrestlemania, can be beneficial in terms of attracting users. However, there is a risk that consumers will unsubscribe once they’ve watched these popular items. Ongoing perceived value, in the long run, is the biggest driver to churn. Services have to continue to provide users with validation of value and a reason to return. Otherwise, consumers will discontinue services to save money or because they feel that the subscription is not worth the cost.”