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Surviving the post-Covid OTT churn

Maciej Czekała, product owner, Insys Video Technologies, takes a look at how the SVoD market might be impacted once lockdowns ease

OTT services have seen an incredible boom as a result of the ongoing global Covid-19 pandemic. Strict lockdowns in most countries resulted in bored populations with very little else to do except consume OTT content – glued to their TVs, tablets and smartphones for months on end. 

However, some experts predict that there will be an inevitable churn once society returns to normal, whatever that ‘normal’ might look like. It is suggested that OTT services that do not fit the bill will likely lose subscriptions. This means it’s more important than ever that OTT services that want to survive can offer innovative services, in order to keep their customers engaged and more importantly, subscribed. So, how should companies adapt in light of this incoming trend?

Lockdown living 

In the UK, it was predicted to last two or three weeks, but fast forward almost a year and lockdown restrictions are still in force. Subscriptions to Subscription Video on Demand (SVoD) services have outpaced projected growth in 2020. The annual increase of SVoD subs grew for the third quarter in a row last year, after declining for the previous four quarters from Q1 2019 through to Q4 2019. 

Figures from the Broadcasters’ Audience Research Board (BARB) further compound this trend, showing that in the middle of July 2020, levels of unidentified viewing (a term used to describe TV set viewing which they cannot identify, including VoD or video games) was considerably higher than levels recorded prior to lockdown. In fact, unidentified viewing averaged 75 minutes per day for one week in July 2020, 61 per cent higher than the same week in 2019. 

A third of people in the UK said they streamed more films and/or TV series on SVOo platforms as a result of having to stay home during lockdown. And it’s not hard to see why exactly this is. Children were off school, and parents had very few ways of keeping them occupied. Adults themselves have had their social activities completely disrupted with no socialising, group sports or hobbies able to take place and almost all activity venues closed. With cinemas closed, movie nights at home were the order of the day (Disney Plus subscriptions have blown expectations out of the water) and binging series has taken on a whole other meaning during this pandemic. 

Sports fans are another great example. Prior to the pandemic, they may have been consuming vast amounts of live sports content, but in the immediate aftermath of the outbreak, all sports were cancelled, leaving these people looking for other content via new subscriptions to fill their time. 

Adapting to a post-Covid OTT world

Covid-19 will not disappear overnight; the UK’s chief medical officer has previously said that some form of restrictions may need to be reintroduced in the winter of 2021, for example. But it’s likely that people may have more freedom coming, and certainly more than they have now. As people gradually return to normal, activities such as socialising in the evening, sports, shopping and so on, will all take up increasing chunks of our time. What we’ll likely find as restrictions lift over the next six months, or at least by the summer is that people will have less time to consume content and will unsubscribe. In one survey, a huge 55 per cent of people said they did not intend to continue streaming films and/or TV series at the frequency they do now once social distancing restrictions are lifted.

Furthermore, it’s been autumn/winter in the northern hemisphere for some time, which means less time outside and more time inside consuming OTT content – but the lifting of restrictions is likely to coincide with summer and more time for outdoor, Covid-secure activities. As a result of all this, it’s almost inevitable that there will be an OTT churn as society returns to normal. 

OTT services must be able to offer innovative services in order to keep consumers engaged and subscribed. The market was competitive prior to the Covid-19 boom, and this looks set to get even worse. Flexibility, adaptability and quality are absolutely key to success. 

One of the biggest frustrations for consumers is a poorly curated content library and a UX which is difficult to navigate. In order to keep subscribers, it’s vital that the vast amount of content available is served to viewers in a personalised manner, such as curating personalised ‘recommended for you’ sections. Content discovery must be seamless otherwise a user will just log out and search for something to watch via another OTT provider. In service push-messages can help here, but it’s important to have the right algorithms in place to enable accurate personalisation and customisation of the UX. The serving of personalised ads (in the case of non-subscription-based services) is also possible with this technology, which can significantly boost revenue for the provider, and improve the viewing experience for the consumer. 

The flexibility to customise packages is also attractive. Consumers want to be able to remove and add different packages, such as multi-room viewing when their child returns from college/university for example, or the ability to purchase specific premium content. It’s inevitable that some viewing habits from Covid-19 might stick – we might find that people like holding movie nights in their home and will continue to purchase premium movies as and when they want to. Consumers have totally altered their behaviour and it’s obvious that not all of these behaviours will revert to what they previously were. 

Homeworking has changed the way people spend their day; there is no 9-5 anymore. As a result, it’s probable that Covid-19 will have further accelerated the trend away from linear viewing. People and families who may ordinarily have watched linear TV in the evenings may become used to having the flexibility to watch OTT content as and when they choose, on multiple devices. As more members of the household have been streaming simultaneously during Covid-19 lockdown restrictions, services which can continue to offer multi-device, flexible streaming will be at an advantage. 

The quality of content also needs to be second-to-none. This is clearly something OTT providers should prioritise anyway, but with increased competition amongst services, it will become even more important. OTT providers must be investing in content which appeals to consumers – not only can this help maintain existing subscribers but being able to adapt to trends in society can ensure continued growth beyond Covid-19. 

New habits die hard

I predict that we may see less of a churn in OTT subscriptions if providers approach the lifting of restrictions in the right way. Consumers have become used to a wide range of choice when it comes to video consumption, which means OTT platforms are in a strong position going forward as sources of vital, and comforting entertainment. What we may find is that brands who get it right take on highly differentiated roles post-lockdown, offering content for certain demographics for example, or providing particular features which make it appealing to multi-person households i.e. multi-room streaming, child-controls, customisation and so on.

It’s difficult to see video consumption behaviour completely reverting back to normal once lockdown restrictions are lifted globally. The longer they last, the more persistent these habits become. And of course, many households have invested in new entertainment hardware to be able to adjust to life during Covid-19, purchasing more smart TVs, games consoles and more tablets in homes than ever before. Some users will also have tried SVoD services for the first time as a result of spending more time at home. As one Deloitte study recently said: “the foundations for greater on-demand consumption have been laid.”