According to new research from Parks Associates, 76% of US broadband households subscribed to an OTT video service in Q1 2020, while the churn rate for streaming services was 41%.
Of the 10,000 surveyed respondents, OTT actually had a higher penetration than traditional pay TV services which were only subscribed to by 62%.
Steve Nason, research director at Parks Associates noted that this growth has coincided with cinemas being shut across the US, with OTT services responding by adding new releases and extending their free trials. He said that this has seen OTT subscriptions increase with churn declining slightly since last year.
The analyst however warned that this may be short lived in a post-coronavirus world: “We will see, as lockdowns ease, if these strategies lead to sustainable growth or if the OTT industry needs to adjust again to new viewing patterns.”
The analyst also said: “Of the 41% of households that trialed at least one OTT service, the majority (69%) adopted at least one paid subscription,” Nason said. “New trial offers can be successful in attracting new users, but as competition increases and household budgets shrink, providers will need to explore new service models, such as making a portion of content free or offering discounts to longer-commitment subscriptions.”