Indian subscription OTT video services have high churn rates: Omdia report

Of the markets studied by Omdia’s consumer research, India's the only market where average rates of resubscription were above the rates of churn

e4m by Javed Farooqui
Published: Apr 18, 2022 8:38 AM  | 3 min read

The Indian pay-TV and over the top (OTT) platforms are finding it challenging to retain customers, a new survey by London-based Omdia on the video subscription market in the country has revealed. The study also noted that most churners end up resubscribing within a year.

As per the survey, poor user experience is a key pain point for Indian pay-TV churners, whereas content is the key churn reason for online subscriptions.

The churn rates for Indian subscription video services are very high compared to other surveyed markets. It stated that most video services in India had an annual churn rate of over 10% as of November 2021.

Of the markets studied by Omdia’s consumer research, India was the only market where average rates of resubscription were above the rates of churn (61% of cancelers versus 50%). For most online subscription video services, Indian consumer rates of resubscription were between 25% and 85% higher than their respective longer-term churn rates.

Omdia said that the consumer survey as part of the Consumer Research service is a biannual survey run in April and November of each year, asked to a nationally representative and statistically significant sample of the population. In the case of India, this sample is representative of the online, English-speaking consumers in the market.

The survey also highlighted that over 40% of online video usage is undertaken by consumers aged 18–24, 30% by 25–34-year-olds, and 16% by 35–44-year-olds. This synchronization with country demographics suggests that video services across all sectors have equal appeal to all age groups, it added.

Most survey respondents were monthly users of free/advertising-funded video services, alongside over 80% who use online subscriptions, pay-TV, and transactional video services.

Advertising video’s dominance is equally clear from the average number of services taken, which as of November 2021 was more than twice the average number of paid subscription video services taken (8 versus 3.8), the survey stated.

Usage of other audiovisual media sectors is also high, with almost half of respondents frequently going to the cinema, more than a third buying physical video, and 42% using illegal piracy websites for streaming video.

The survey pointed out that "being free” is no longer the leading reason for piracy in India. Instead, watching new content that is otherwise unavailable in the market leads, with 41% of videos pirated. This is closely followed by 38% of respondents who say that pirate content is easier to find.

Although smartphones are the dominant platform for video usage of India’s video services, their position as consumers’ first choice is flat or falling with time, with 43% of SVOD users and 62% of AVOD users in November 2021. Although smartphones still dominate consumers’ choice, smart TV preference rose to almost 20% of SVOD users—however, this was still only 8% of AVOD users’ first choice of device, the survey said.

The survey revealed that the most prevalent reason for churning from both pay-TV and online subscription video services was not the cost (23% and 21% of cancelations respectively). Instead, “poor quality of service” and “lack of content” (27% and 24%, respectively) were the leading reasons for each sector.

This was closely followed by “poor user experience” for pay-TV (21%) and “no longer used it” for online subscriptions (21%). In terms of resubscriptions, most resubscribed to watch newly released content (38% of pay-TV resubscriptions and 39% of online).

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