Study finds Hulu subscribers more likely to cancel than Netflix subscribers

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And Amazon Prime Video subscribers are no more or less likely than average.

A study commissioned by Vindicia and performed through nScreenMedia has found that Hulu subscribers are more likely to cancel their service than Netflix subscribers. Now, as a Hulu subscriber and Netflix subscriber, I can confidently say that if given a choice, Hulu would go first, although Netflix is on shaky ground with me lately, but I digress.

That being said, the study touched on various other aspects of the SVoD (Subscription Video on Demand) industry. The study, “Keep My Customer” – Why Consumers Subscribe To, Stay With, Cancel, and Come Back to Online Video Services, found that 70% of households in the U.S. and 40% of U.K. homes have a subscription to at least one streaming video service, and that the average subscriber in the U.S. watches 3.4 services and pays an average of $8.53 per service.

One of the study’s major findings is that involuntary cancellation is a serious problem for the industry. These payment failures occur when a credit card problem, such as insufficient funds, results in automatic cancellation of a customer. The study revealed that over a quarter of U.S. and a third of U.K. online video streamers have had an SVoD service canceled due to a credit card problem. And of those groups, 30% did not return to the service.

“Involuntary cancellations are a huge problem for the SVoD industry, particularly among young subscribers,” said study author Colin Dixon, Founder and Chief Analyst at nScreenMedia. “Young adults from 18 to 34 years old are twice as likely to have experienced involuntary cancellation in the U.K., and three times more likely in the U.S.”

Colin Dixon
hulu subscribers

Amazon’s influence is also expanding in the SVoD market.

“For video streaming services, the ability to acquire and retain subscribers is vital to their success,” said Anthony Goonetilleke, group president, Media, Network and Technology, Amdocs. “However, streaming services are losing subscribers—and millions of dollars in annual revenue—due to involuntary credit card cancellations. This kind of customer churn is largely preventable. By leveraging the right intelligent technology, video streaming providers can recover failed payment transactions and capture revenue that would otherwise be lost, enabling them to better compete in a highly competitive market.”

Anthony Goonetilleke

Hulu subscribers more-likely to cancel

Netflix subscribers are slightly less likely than average to have canceled service in the last year. Hulu subscribers are slightly more likely. And Amazon Prime Video subscribers are no more or less likely than average. The top two reasons cited for canceling a video service: people couldn’t find enough content they liked and didn’t find the service good value for their money.

Amazon’s influence is also expanding in the SVoD market. The study found that one-third of UK and U.S. Prime Video subscribers have purchased an add-on video service, with higher income individuals more likely to use Amazon Prime Video and to purchase an add-on.

In the U.S., the most popular video add-ons are premium services like HBO, Starz, Showtime, and Cinemax. CBS All Access is also very popular. In the UK, the most popular video add-ons are Eurosport Player, Discovery, ITV Hub+, and FilmBox.

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Free trials aren’t as abused as you would think

The study also found that free-trial abuse is not a serious problem for online video service providers. While 49% of U.S. and 62% of U.K. online video subscribers have canceled at least one service within the free trial period, only 5% in the U.S. and 2% in the UK have canceled within the free-trial period four or more times in the last year.

Content is what keeps subscribers in the service

When it comes to retaining existing subscribers, content is king. The study found that 64% of U.S. subscribers and 55% of U.K. subscribers have been with their longest-tenured service for one year or more. When asked why they stay, respondents said having plenty of interesting content to watch was the top reason. Value for money was a close second place, and ease of finding something good to watch came in third. Interesting original content was the fourth reason, while providing plenty of new shows took the fifth-place spot.

You can get the full report and read some more interesting statistics. Just hit the links below to download it. You will be asked for your name and email address and given the opportunity to subscribe to their newsletter.

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  Source: nScreenMedia

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