Subscription churn refers to the rate at which subscribers cancel their streaming service memberships.
For many streaming platforms, churn rates of 30-40% per month are becoming common. This means a significant portion of users subscribe only temporarily, often to watch specific shows or series, and then leave.
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For example, when the third season of a popular show like Mirzapur is released, many people might sign up for a month to binge-watch it. However, once they’ve finished the series, they may cancel their subscription.
The same happens with other shows on platforms like Netflix, where people join to watch hit series like The Squid Game or Bridgerton but then leave afterward.
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Churn can be voluntary or involuntary. Voluntary churn happens when users decide to cancel their subscriptions after watching what they want. Involuntary churn occurs due to issues like payment problems or expired credit cards.
The Reserve Bank of India’s 2021 guideline, which requires additional authentication for recurring payments, has made automatic renewals more difficult, leading to more churn.
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Additionally, many users prefer short-term subscriptions rather than paying for a whole year upfront.
To combat churn, OTT platforms are trying different strategies. One approach is to release content gradually, such as one episode per week, to keep subscribers engaged longer. This way, users are less likely to finish everything in one go and cancel.
Experts suggest that to retain subscribers, platforms need to offer high-quality and consistent content. They also need to ensure their services are easy to use and offer good value for money.
For instance, some platforms are exploring flexible pricing plans and improving content variety to keep users interested.
Overall, managing subscription churn is about balancing content quality, user experience, and pricing strategies to keep subscribers from leaving and attracting new ones.
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