High Subscriber Churn Sign of 'Maturing' SVOD Market: Deloitte

At least 150 million subscription VOD accounts will be canceled globally next year, said a Deloitte report Wednesday, projecting a 30% industry churn rate. But more subscriptions will be added than dropped, the average number of subscriptions per person will rise, and many subscribers who cancel may re-up, it said. Analysts Chris Arkenberg and Andrew Evans called the trends signs of a “competitive and maturing SVOD market.” Retention will be more important than ever, they said: Churn costs SVOD providers up to $200 per subscriber in acquisition costs, and those could increase as the number of SVOD services grows and the pool of new consumers declines. Four in five U.S. households had a paid SVOD subscription this year, with about 35% churn, said the analysts. While providers are spending “billions of dollars” to shore up their content with top-tier programming, “consumers will only take so many price hikes,” they said, which has led to a rise in less-expensive or free ad-supported offerings.