Well, A New Headache for OTTs
The rate at which customers quit their memberships with streaming services is known as subscription churn. Churn rates of 30–40% per month are becoming typical for several streaming services. This indicates that a sizable percentage of customers sign up for a short period of time, frequently to watch a particular episode or series, and then discontinue.
When a popular program like Mirzapur releases its third season, for instance, a lot of people could join up to binge-watch it for a month. They can, however, terminate their membership when the series is over. Similar things occur with other shows on services like Netflix, where viewers sign up to watch popular episodes like Bridgerton or The Squid Game but later discontinue their subscriptions.
Both voluntary and involuntary churn can occur. When customers choose to end their memberships after seeing what they want to, this is known as voluntary churn. Involuntary churn might be brought on by reasons such as credit card expiration or payment difficulties. Because to the Reserve bank of India's 2021 rule, which demands further identification for recurring payments, automatic renewals are now more challenging, which increases customer turnover.
Furthermore, a lot of people would rather have a short-term membership than pay for an entire year up front. OTT platforms are experimenting with various tactics to counteract attrition. To keep customers interested for longer, one strategy is to distribute content gradually, like one episode per week. Users are therefore less likely to cancel after completing everything at once. Experts advise platforms to provide constant, high-quality material in order to keep users. Additionally, they must guarantee that their services are affordable and user-friendly.
To keep customers interested, certain platforms, for example, are investigating flexible pricing options and enhancing content variety. In general, controlling subscription churn involves striking a balance between user experience, content quality, and price policies in order to retain current members and draw in new ones.