Best practices for mitigating subscriber churn in OTT in 2024

In today’s competitive landscape of Over-the-Top (OTT) entertainment market where content is available at the fingertips of viewers, subscriber churn has become the biggest threat to business growth.

As per the recent report (Source: Park Associate), up to 44% of paid OTT subscribers churn out after their first year of subscription in the US. Therefore retaining subscribers has become a top priority for OTT companies after acquiring them. This blog delves into the reasons behind subscriber churn and explores how OTT platforms can mitigate this issue using advanced data analytics and targeted strategies.

Understanding the root causes of subscriber churn in OTT

When it comes to understanding the reasons behind this dramatic industry-wide average churn rate going all the way up to 35-40%, we need to delve deeper into the customers’ psychology behind it. What goes back into the mind of a customer while deciding whether to continue with their subscription or cancel it, is the basic question any Product Manager working on user growth and retention would think of.

Recently I got a chance to attend an invite-only round-table dinner event in Bengaluru, India last month. The table was filled with techies working at the global IT MNCs, I asked the same question – What makes you cancel your OTT subscription?

Here are the top three reasons that were stated by the majority of them. Let’s dive into a few root causes behind the subscriber churn in the OTT industry.

Content relevance

Content relevance stood as the top reason behind subscription cancellation. When viewers feel that the content offered is not aligned with their interests or is outdated, they are more likely to cancel their subscriptions. Keeping the asset library fresh, diverse, and relevant is key to retaining viewers. Doing regular customer surveys could be a solution to stay informed on the subscribers’ interests.

User Experience Issues

Quality of experience (QoE) stood as the second most prominent reason behind subscriber churn in the OTT industry. Poor user experiences, such as buffering, higher startup delays, and frequent app crashes, can lead to frustration and dissatisfaction, encouraging users to churn. Setting up a real-time QoE analytics software could help you keep a pulse of your viewer experiences.

Pricing Sensitivity

The price point stood as the third most quoted factor influencing subscriber churn. Customers may be sensitive to frequent pricing changes, particularly after free trials end or when subscription prices are increased. Transparent communication and offering flexible pricing plans can help mitigate the impact of pricing on viewer churn.

Role of analytics in identifying churn risks

Analytics in general is the only way one can proactively gauge the future of their business. Modern day OTT companies leverage insights into viewers’ experiences, behavior, and streaming performance to proactively identify potential churn risks and take actions toward viewer retention.

Leveraging QoE analytics

MediaMelon’s advanced QoE analytics help you monitor and analyze your viewer experiences and streaming health in real time. By tracking key metrics like startup delays, and re-buffering ratio, along with a host of other important experience-related metrics, identify potential churn threats in your OTT business.

Common strategies for mitigating subscriber churn

OTT platforms need to implement targeted strategies to combat subscriber churn, depending on how their viewers’ are consuming content. Let’s dive into a few common strategies that could help OTT platforms mitigate subscriber churn.

Personalized content recommendations

Personalization is a powerful antidote for viewer churn in the OTT industry. It’s easier for brands like Netflix to have a dedicated in-house tech team for recommendations, and ace the personalization game. But what about a growing OTT brand that could not invest a lot of tech bandwidth in content personalization?

MediaMelon’s analytics enables OTT platforms to get insights into tailoring content recommendations based on individual user preferences, keeping viewers engaged and less likely to leave.

Continuously improving streaming quality

While most of the OTT companies who decide to fix the streaming issues in a bunch of sprints, fail miserably. Do you know why? It is because delivering an error-free streaming experience is a work in progress, and never happens in a few sprints.

With numerous devices and sessions running simultaneously, it is important to prioritize fixing the most critical issues first. Real-time QoE monitoring is a crucial step for maintaining high streaming quality throughout. By reducing buffering and improving playback, OTT platforms can enhance the user experience, leading to higher retention rates.

Optimizing the user journey

MediaMelon’s App Insights helps you optimize the user journey by smoothing transitions between free and paid tiers and optimizing the most followed path toward paid conversion. This reduces friction during the conversion phase and helps in retaining subscribers.

Conclusion

Subscriber retention demands ongoing efforts and continuous improvement in content delivery. Regularly reviewing and updating strategies based on viewers’ behavioral data insights is crucial for keeping churn rates low and ensuring high user satisfaction. At MediaMelon, we are dedicated to helping OTT platforms achieve these goals. Our innovative solutions provide actionable insights that drive better decision-making, supporting long-term success and audience growth.

Book a demo with our video experts and see MediaMelon customized for your OTT platforms’ requirements in action now!