Free Trials Have a One-Third Success Rate, Minimal Abuse, Says Report

Thirty-two percent of over-the-top free trials convert to a paid subscription, said a Parks Associates report Monday. Acknowledging a potential for “free trial abuse,” Parks analyst Glenn Hower said only 1 percent of consumers are “serial trialers” who take advantage of free trials to avoid paying for services. More than one-fourth of U.S. broadband households trialed at least one OTT service in the previous six months, and 47 percent subscribed to at least one trial service after the free period expired, said the report. Spending on transactional services has fallen, but average monthly spending on subscription OTT video rose to $7.95 per U.S. household last year, it said. Most households build their services around at least one of the top three services -- Netflix, Amazon and Hulu -- which also have the most effective trial conversion rates, Hower said. "Since there isn't much money left for niche OTT services, these services should not expect to expand beyond their particular audience niche and may also have to implement tiered services or hybrid business models to diversify their subscriber bases and generate incremental revenue wherever possible,” he said.