SVOD

The Challenge of Churn

The Challenge of Churn

Mike Bloxham – EVP, Global Media & Entertainment, Magid

Tony Cardinale – SVP, Data Science, Magid

Media use has been changing rapidly and that requires paying constant attention to how viewers use services, for example, which streaming services they subscribe to and which they cancel. Churn among streaming service subscribers is typically seen as a negative: Providers try to minimize churn, maximize retention. Based on analyses of their Subscriber Science Monitor data, Magid researchers Mike Bloxham and Tony Cardinale offered a fresh perspective on the drivers of churn as well as on the implications of churn for content providers. They conclude that churn is inevitable—and that some churn is correlated to growth and cultural relevance. The key to their insights was a segmentation analysis that focused on viewers’ propensity to churn.

Key Takeaways

  • As SVOD has become mainstream, subscriber growth does not come from non-streamers anymore, but largely from churn between services. This makes churn an important issue that requires careful analysis to inform providers’ strategy.
  • Churn is not simply a reflection of the quality of the service. The analyses show that there are viewer segments with different predispositions to churn. As a result, it is important to look at the churn rates among each segment to get a full understanding of consumer sentiment.
  • Not all churn is negative. Some churn, driven by engaged viewers, is indicative of a healthy service. Subscribers with higher churn rates are likely among the most important to the content subscription platforms, as they are deeply involved in the content and are most active on social about that content.
  • To manage churn and resubscription, we need to recognize the different motivations of viewer segments. This is important for the health of a streaming business.

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