5 Strategies to Reduce Churn in OTT Video Services

January 28, 2019

  • Churn prediction and management
  • customer churn
  • OTT Industry
  • OTT Services
  • OTT video
  • OTT video growth
  • Over the Top
  • Reduce Churn
  • VOD

In the old cable and set-top box days, consumers had to jump through several hoops to cancel their services. At a minimum, they would have to spend considerable time on the phone with customer service agents who would try everything they could to keep their business. At worst, they would have to return equipment to a brick-and-mortar storefront, where employees would try just as hard to dissuade them from canceling the service.

Making it easier for customers to manage their accounts is just one of the reasons why over-the-top (OTT) video and on-demand video services are replacing traditional cable. However, that also means customers can cancel their services with just a few clicks in a self-service portal. Customer churn reduction for telecoms, OTT, and VOD companies takes more strategy and finesse than simply putting a customer service rep between subscribers and their service cancellation.

Why do People Cancel VOD/OTT Services?

Churn prediction in the OTT and VOD industry has always been tricky. Customers might cancel due to rising prices or changes to their bundles. According to a Wall Street Journal report, nearly 50 percent of subscribers to some services lose interest after a must-see series or sports season ends. Other times, competing service providers might offer cheaper bundles, better content, or a better user experience overall.

Churn management in the OTT industry involves optimizing content and services on several fronts. Without static set-top boxes or complicated cancellation procedures, service providers need more than just personable customer service reps to reduce churn. They should also be applying data mining and artificial intelligence to churn management strategies so they can take all relevant factors into account.

How to Reduce Churn in the VOD/OTT Industry?

Bundle changes and lack of interest in available content are the most common reasons customers cancel their video streaming services. However, service providers lose subscribers for many different reasons. Contract changes and the end of a popular show or season aren’t the only churn predictors.

For example, older equipment, limited services in their contracts (i.e., no bundle), and shorter contracts can also indicate high churn risks. Reducing the churn rate means learning to identify indicators and address them faster than competing services. Most providers of OTT and related digital services will benefit from the following strategies:

1. Setting up Early Warning Detectors 

Track subscriber behaviors to determine when they’re likely to unsubscribe. If a consumer primarily watches only one show, and that show’s season is set to end soon, proactively promote similar content to keep them engaged. This will require advanced user analytics and, just as importantly, the agility to act upon the data.

2. Targeting Customers with Personalized Bundles

Advanced analytics also make it easier to personalize offers and bundles. Package discounts can appeal to those looking to lower monthly bills. New channels can entice fans of specific programs. And non-video services — think connected home options — make attractive bundles even more valuable.

3. Using AI for Timely Content Recommendations

AI-driven algorithms are necessary for providing timely, relevant recommendations. Netflix does this quite well, recommending movies and shows based on recently viewed content. However, with more advanced AI systems, content suppliers can provide recommendations based on more than content, such as demographics.

4. Promoting New Offerings through Apps

For a higher level of personalization, promote new offerings through mobile apps and email and portal inboxes. For example, Comcast and other providers implement notices on their apps to easily recommend new shows and channels directly through a subscriber’s mobile device.

5. Deploying New Products and Services Quickly

Canceling subscriptions isn’t the only process that should be fast. OTT video providers must act quickly to provide customers new digital services and bundles before they become irrelevant. If it takes months to roll out a new service, bundle, or promotion, providers might lose subscribers to the competition. Fast time to market is essential.

For example, one of our customers followed these techniques and leveraged Evergent to deploy a monthly bonus TVOD offer. The program provided a free on-demand movie or program monthly to base-level streaming subscribers. The user received a monthly email with the offer details and content recommendations. The Evergent-powered offering encouraged basic subscribers to frequently visit the on-demand content library and better understand the value-added offerings and packages available.

VOD and OTT video services will continue to take market share away from traditional cable television services. Churn prediction and management in the VOD industry are critical to ensuring providers can keep up with competition and build long-term subscriber relationships.