19% of U.S. broadband households have cancelled an OTT service in the past 12 months, compared to 20% during 2015. The figures are from Parks Associates, the research and forecasting firm. OTT services have been stable for the past year, with top services Netflix, Amazon, and Hulu all reducing their churn rates, the company says. The figures relate to paid-for services and not free trials. If you focus on households that still currently subscribe to an OTT video service, one-third have cancelled one or more services in the past year. “This shows there is quite a bit of experimentation occurring right now,” says Brett Sappington, Senior Director of Research at the company.
Meanwhile, Parks Associates has provided figures that appear to confirm that subscription OTT is gobbling up consumer budget for physical media and digital transactional video. The research firm’s ‘OTT Video Market Tracker’ (covering the U.S. and Canada) finds that households with OTT video subscriptions increased their spending from an average of $3.71 per month in 2012 to $7.95 in 2016. At the same time, spending on physical media purchases and rentals declined from an average of $15 per month to $8 per month and spending on digital transactional video declined from an average of $2.42 per month to $1.42 per month. “On average, spending on subscription OTT video services now accounts for 85% of all household spending on Internet video,” says Glenn Hower, Senior Analyst, Parks Associates.