As streaming services have both proliferated and added subscribers throughout 2020, many of them have attempted to get new users in the door by offering free trials of various length.
A new survey says that the majority of those who sign up for free streaming trials have kept subscribing past the free trial period.
According to a new white paper from research firm Parks Associates, “Improving OTT Customer Engagement with Smart Data,” not only did 40 percent of U.S. broadband households do a free trial of a streaming service since the start of the coronavirus crisis, but nearly 70 percent of them kept subscribing after the trial was over.
“The use of free trials, promotional offers, and bundled packages has accelerated through the first part of 2020, during the initial stage of the COVID crisis,” Steve Nason, Research Director, Parks Associates, said in the announcement.
“The conversion of those trials to paid subscriptions has also increased, but to keep those subscribers long term, providers need to deliver a continually evolving and personalized experience. Taking in and leveraging the data gained from viewer habits and actions offer OTT video service providers an opportunity like never before to engage subscribers through every phase of their journey with their services.”
The report also said that broadband households in the United States, on the average, spent $16 on “over the top” streaming services each month in the first quarter.
The different streaming services have taken different approaches to free trials. Netflix in October stopped offering its thirty-day free trial in the United States, while Disney+ offered a free trial for most of its first year but recently stopped. Hulu does still offer such a trial.
Quibi, the much-maligned short-form streaming service that launched earlier this year, offered an uncommonly long ninety-day free trial, meaning that many Quibi customers never paid for the service at all, since it folded not long after the free trial ended. One report said Quibi failed to retain 90 percent of its free trial participants.
“Companies that effectively integrate smart data are leading the battle to engage the ever-elusive digital media and entertainment consumer,” Nason added. “The overall OTT churn rate has dipped some, but if the economic impacts from COVID-19 pandemic linger, households will continue to scrutinize their spending in entertainment services and determine which ones to keep and which ones to cancel. Smart data usage can give an advantage to a provider in keeping their service at the top of a household’s entertainment equation.”
The paper was released as part of Parks Associates’ virtual conference Future of Video: OTT, Pay TV, and Digital Media.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver. Image: Reuters.