OTT CHURN: How You Can Improve Retention For Your OTT Platform

Published On August 29th, 2023 5143How To
Learn More About OTT Streaming

Ever wondered how to answer the pressing question of how to keep your subscribers chained to your OTT platform?

Walk with me to know more about this article…

Customer lifetime value or CLV depends on how good your subscription business VOD platform holds them back or rather keeps visiting your website time & again. OTT Churn revolves around this integral aspect. 

What is OTT Churn?

An OTT churn is usually referred to the number of subscribers who cancel their OTT platform membership due to the following reasons for your subscription services.  Here the subscriber churn rate depends on the overall target market size that you are focussing on.  This is the most crucial factor which determines whether your brands are positively witnessing growth or declining their profitability. 

There are two types in it: One is voluntary churn & the other refers to involuntary churn. 

“ When we look into the recent statistics of involuntary churn ratio it accounts for 20-40% of total churn.” On the other hand, when we look into Disney+ churn rate it is accounted with 13% whereas, in HBO Max, Apple TV+ & Peacock is found with churn rates of 20% ”

Source: Advanced Television 

Looking at this trend has been pushing all kinds of OTT business streamers, to retain its customers. There are some who migrate away from traditional pay-TV services since many of them are enticed with motivational extending subscriptions.

Now you must be thinking, “how do I come to know about this factor at all? ” & hunt for…

What does the OTT Churn rate actually mean? 

To explain this further let me illustrate a simple example… 

Let’s assume you have an entertainment channel consisting of about 50,000 subscribers and you hold an account of 500K churners in a month. When we calculate, it equates to a 10% churn rate.  The next question arises what can be a manageable churn rate to be a consistent player in OTT

Well, I wouldn’t say there is a definite number in which you should be persistent to achieve, but yes, it’s vital to compare your turnover rate with your top competitors and industry averages on a frequent basis. The majority of established OTT brands have substantially lower attrition rates than 5%.

For example, Netflix used to have a turnover rate of less than 1% a month. However, recent data indicates that even the big players are beginning to wrestle in this rapid race of OTT.

Now, let me give an idea for you to count on all these factors of churn rates & how you can leverage them! 

How to calculate my streaming platform’s churn rate?

Calculate OTT churn rate

Here is an interesting way to help you with it, further… 

If you have created OTT apps or video streaming platforms, you can calculate your video monetization platform charges based on each subscription model and its business type. After that, you can easily know it by

  • Choosing a time-frame to count based on monthly, quarterly, or annually 
  • Determining the overall number of churned consumers in that time period
  • Then divide the total number of churned customers over that period by the total number of subscribers on the first day of that period.

To have a better understanding, we’ll help you to know it through the global leader which is a pioneer in the OTT industry.  

Global Leader Netflix Churn Rate & How They Reduce It

Netflix OTT Churn Rate

Netflix has undoubtedly revolutionized the way we watch our favorite shows, with over 207.64 million members watching a combined million hours of television and movies every day. It’s also become a major player in our daily lives, influencing everything right from devices that we choose to watch, to our language and cultural practices.

Having a churn rate from 2.3% to 2.4% in the last 2 years, Netflix continues to constantly engage its customers irrespective of the rest of the premium streaming market players which gained around 5.3 to 7% of the OTT retention rate

Let’s see how they achieve this variability time & again, keeping their potential members intact! 

  • Decisive In Sticking to Same  

Despite the recent study with an estimation of the past few years, Netflix’s market share decline of  85% has never seen subscribers withdrawing from its services. This tells us that some of the other distinctive subscription services which are evolving are observed by consumers for a period to test the waters, holding top OTT services to watch on the entertainment screen.   

  • A Deeper Insight into User Preferences

One of the key aspects where Netflix is made irresistible is that they surprise their users with their own original shows. Some popular shows like a sweet tooth, high on the hog, etc grabs their user’s attention & pulse of what they like to watch. Some of the other metrics are user views of episodes, browsing scroll habits, type of devices used, ratings & searches conducted, etc.   

  • Email: We Added A New Show That Might Interest You 

Just like others, Netflix holds its loyal customer base with prior recommended shows to users where large content collections are accessible. So, they majorly maintain a low churn rate by not only simply gathering information about users watching activity; but also iterate them, by sending emails when new shows are added based on previous liked viewing habits.

  • Push/In-App Notification – Watch New Season 

In general, users tend to get bothered and disturbed by frequent push notifications. It all depends on how this essential feature is put to use via your OTT app development. Now there is no question of missing any entertaining shows, because Netflix makes sure to finely customize for its users by iterating about new seasons, shows i.e to kept in high priority during the watch mode. 

  • Get back to Users via Recommendations 

Did you know, on average people spend 17.8 minutes before even selecting shows to watch on Netflix?

That’s really less time to entice its customers, and this is where new recommendations create the magic of them to continue to stay or keep coming back to watch more. Everything is recommended to its users depending upon their varied watching habits. Viewing tastes are catered according to genres, ratings, etc.  

  • Split Test Conducted & Users Kept in Loop  

When it comes to split testing during revised phases of product innovation, Netflix in no surprise strategically tests each year with millions of users across the globe & utilizes this opportunity to keep its users informed with any changes and explains why it has been incorporated. Users aren’t left uncompromised during the platform’s navigation with new changes. This has led to a positive impact in increased metrics of OTT retention rate.  

Yes… Now let’s look into the types of Churns, as suggested before & understand how to reduce the churn rate and make the best OTT platform

Types of OTT Churn: 

OTT service subscribers generally choose to cancel or their subscription gets lapsed in these key categories. Let’s discover more about them! 

1. Voluntary churn

Usually, these are subscribers who cancel their selected subscription on purpose. They have been binge-watching series for a long time when they signed up & now they want to withdraw from its services. Reduce voluntary churn by improving content, refreshed content library, enhance UI/UX, and other factors to keep them constantly engaged. 

2. Involuntary churn

Here users churn out unintentionally, due to some platform issues such as transaction payment functionality, or due to the passed renewal dates in the subscription. Some of the easiest methods to reduce involuntary churn is, you can notify your users when dates of expiration are nearing, automate payment processes via the backend banking system, etc. 

How to reduce the OTT Churn?

How to reduce the OTT Churn
  • Price Factor 

Prices play a dominant role in deciding if subscribers want to stay or jump ship when they come to know if anything further is worth the hike in price. Once your subscribers feel there can be better preferences, & are now aren’t fully up to the mark, there might be a reason for OTT churn. 

  • Content is the King 

After a price-fit paid subscription service, if subscribers don’t get to watch anything to their interest, then you can pick it as the most-cited reason for people to withdraw from your subscription-based platform. Another reason to state is if you could make content searches easily discoverable and guide them in loads of content choices, this can change.  

  • User experience is the key

A seamless & intuitive user experience is the perfect way of retaining your subscribers always.  To overcome high rates of OTT churn & drive engagement video streaming service providers need to be vigilant while updating features or enhancing functionality, encompassing it to the core. When it exceeds consumer expectations, a huge variability of OTT churn reduction can be observed. 

  • Engagement Sticks to Added Value 

Your subscribers stick to top video streaming platforms such as Netflix, Hulu, or Amazon Prime. But some of the new giants in the OTT industry such as Disney +, HBO Max, or Peacock also come up with fresh content libraries which perform much better. This is where they leverage extended free trials to hold better engagement ability amongst users & procure new subscriber growth.  

How to compete with the Global Platforms? 

When we consider this essential aspect, one thing remains certain & that is your customers have a very minimal level of tolerance when it comes to subscribing to OTT platforms viewing packages. Narrowing this thought further, we get to know that the user’s capacity to withhold will be one to five subscriptions. 

Therefore, it is a silent message implied here for branded OTT service providers who need to provide truly curated stuff which values its specialty in order to earn a loyal & passionate audience. Currently, they not only stick to big shot offerings but also welcome new players tentatively facilitating them, more than a flexible budget base. 

Some of the checklists that you can consider are:

  • Know what makes your users churn 
  • Learn & fix the sweet OTT pricing pick spot 
  • Keep your content freshly incentivizing
  • Stay connected with users constantly 
  • Be sure of your techies being flawless 
  • Give a token of promo rewards to users 
  • Create a win-back strategy to grab them again 

All in All

The most growth level indicator for subscription networks is directly dependent on OTT churn. Keeping an eye on cross-platform OTT apps and other data points will positively give your subscription churn rates a new turnkey which makes sure that what you’re giving your subscribers is what they are really looking for. 

Further to that,  you won’t have a hard time holding your subscribers, if you communicate with them on a regular basis, provide exceptional service, and enhance brand loyalty which boosts your overall subscriber retention.

Vijay Amirtham

Blogger & OTT Expert at VPlayed. Interested in digging deep into video streaming media tools, and Love to blog, discuss and share views on the legal OTT app development' & latest technologies tips, and tricks. He's also passionate about photography loves to capture the pure essence of life.

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