As reported by MediaPost, a recent Parks Associates report shows that about seven percent of U.S. broadband subscribers canceled their Hulu Plus subscription over the past 12 months, which represents about half of the service's subscriber base. Compare that with Netflix, which lost only about nine percent of its subscriber base. In general, the "churn rate," or number of canceled subscriptions, for streaming video services can be high, but Hulu Plus seems to have taken an especially big hit.
As consumers decide what they want out of their Over-the-Top (OTT) video experience, the industry is seeing some fairly high churn rates. While typical for subscription-based industries, some companies are managing better than others.
According to Parks Associates, 4 percent of U.S. broadband services have canceled their Netflix service over the past 12 months, representing about 9 percent of its overall subscriber base. Comparatively, 7 percent of those households have canceled Hulu Plus, representing about half of its subscriber base.
"The surprising element for us was Hulu Plus," says Brett Sappington, director of research at Parks Associates. "To shed a number of subscribers equal to half or more of your current subscriber base is a huge problem."
Through its Video Market Tracker service, Parks is following the details and trends of more than 75 OTT services available in the U.S. Of those services, many are small and specialized, such as those offering Korean films and programming or catering to a specific genre (like Horror), Sappington says. Among those smaller services, the churn rates are much higher as consumers try them out for a short period of time before deciding to continue.
To read the complete MediaPost article, click here.
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