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Ampere: Bundles reduce user churn

Ampere: Bundles reduce user churn
Ampere: Bundles reduce user churn

As the competitive streaming video business in the U.S. has matured and companies have become more focused on profitability, customer retention has become at least as important as subscriber growth. Now, the latest data from research firm Ampere Analysis shows that a new trend of bundling streaming services into packages is reducing customer churn rates.

Overall, 42 percent of U.S. streaming subscribers subscribe, cancel, and resubscribe regularly, according to Ampere Consumer’s findings. However, the research also found that “Disney subscribers who previously canceled and then returned (also known as ‘resubscribers’) to purchase the Disney+/Hulu/ESPN+ bundle are 59 percent less likely to cancel within 12 months than those who only use Disney+.”

With Walt Disney/Warner Bros. Discovery (Disney+, Hulu and Max) and Comcast (Peacock, Netflix and Apple TV+) unveiling plans to deploy multiple streaming services in recent weeks, Ampere data also suggests that there is currently “limited overlap” in user usage of those services, “suggesting great upselling and churn mitigation potential.” The company’s Q1 2024 consumer data shows that only 15 percent of Disney+, Hulu or WBD’s Max subscribers currently use all three services in the household, “and only 10 percent of Comcast mobile, broadband and television customers who subscribe to Peacock, Netflix or Apple TV+ currently use all three.”

This means that packages are intended to help build customer loyalty and make it easier for consumers to purchase additional services.

“As the SVOD market in the U.S. becomes increasingly saturated, it is harder to find new subscribers, making retention even more important,” said Daniel Monaghan, head of research at Ampere Analysis. “There is a significant group of consumers who frequently subscribe, unsubscribe and resubscribe to SVOD platforms. Reducing this behavior would increase the platforms’ revenues and profits,” meaning revenue and profitability.

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