Video-on-demand (VOD) services are now more popular than pay TV, as more customers migrate to streaming. Gain insight into why subscribers leave or remain. Many providers are now enhancing their offerings with advanced video on demand solutions to stay competitive.
Which Streaming Services Are Performing the Best?
There are several kinds of streaming services:
Over-the-Top Video (OTT)
Over-the-top video (OTT) refers to standalone video streaming services that are made available to consumers directly through the open internet.
Video-on-Demand (VOD)
Video-on-demand (VOD) is either transactional (purchase or rental), subscription-based, or free. FVOD (free VOD) refers to content that is free and does not contain advertisements. If it’s free but supported by advertising, it’s known as AVOD (advertising-based video-on-demand).
Netflix and Amazon use the subscription video-on-demand (SVOD) business. Although subscription-based, it usually includes a “contractless” agreement that allows users to cancel at any time. SVOD models are often inexpensive, offer access to enormous collections of films and TV shows, and are paid monthly.
vMVPD
vMVPD – Virtual multichannel video programming distributors are monthly-based online video subscriptions that transmit pay TV channels over the internet. These are commonly referred to as cable television substitute services.
SLIN
SLIN – Subscription linear is a form of OTT video subscription service that transmits live or linear TV channels, usually in conjunction with VOD libraries of material. SLIN covers services run by traditional linear TV operators like Hulu, HBO, and NOW.
The Main Winners Are OTT and VOD
These services are gaining popularity because to their diverse content and the fact that many homes use multiple services to fulfill the demands of different members.
With so many competing streaming services and diverse material available on multiple platforms, consumers frequently cancel and restart their subscriptions after watching a specific series. Most customers prefer to have one permanent streaming provider and then switch between alternative services.
Surprisingly, people tend to continue with VOD despite their “contractless” arrangements. Users may not be bound by a contract, yet they remain loyal to a single VOD. Current VOD trends will benefit streaming providers that can establish themselves as a household’s permanent service the most. Providers that integrate robust video on demand solutions are especially well-positioned to maintain long-term subscriber loyalty.
Why Are Customers Preferring Streaming Services Over Pay TV?
After more than a decade of online video, video streaming has quickly grown into a mainstream industry. By 2026, it is anticipated that there will be 1,300 million OTT video streaming subscribers, compared to less than 1,100 million pay TV subscriptions.
Users are increasingly choosing streaming services over pay TV for a variety of reasons, including:
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Video streaming services are easier to enter and exit than pay TV contracts.
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The option to acquire services based on the content they wish to view at that moment—whether that’s a genre-specific subscription or a particular series.
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New significant services, such as Disney+, HBO Max, and others, have been rolled out internationally.
Another reason why streaming service subscriptions are increasing is that consumers no longer have a single OTT subscription. One significant opportunity is that consumers are transitioning from single-service buyers to seasonal multi-subscription buyers. While this increases the risk of seasonal churn, homes with multiple subscriptions provide a chance for growth. Currently, US families have 2.4 services, whereas the UK, Japan, and other Western European markets have an average of 1.7. By 2026, this figure will rise to 2.9 in the United States and 1.9 globally.
The Three Primary Reasons for Subscriber Turnover
Content
General content fatigue, or a lack of new content to view.
Costs
Too expensive, or reducing expenses owing to having various streaming options.
Technology
Buffering, poor visual quality, a complex service, or the inability to watch on all screens or devices.
Addressing these concerns is critical to maintaining subscribers.
Content Is Key
Content is key, so make sure there’s lots to watch. Encouraging members to watch series rather than films is an effective way to reduce churn.