Vindicia in the News

Toni Fitzgerald, Contributor, Forbes

It’s hard to believe that it’s been only six years since House of Cards premiered on Netflix and suddenly video streaming companies became the big new players in content.

Just how ubiquitous have Netflix, Hulu, Amazon and the like become in our lives? A new study details why people subscribe to these channels as well as what prompts them to stick with or cancel the services. It paints an interesting picture at a time when pay television is struggling to keep subscribers, with many cord cutters replacing those services with over the top services.

The study, commissioned by business-to-consumer digital services monetization company Vindicia from nScreenMedia, examines consumer relationships with streaming video services.

One of the most telling findings is just how widespread subscription video services are. Seventy percent of U.S. households have at least one subscription, compared with 40 percent of U.K. homes.

And the average American subscriber watches 3.4 services. For each one, they pay an average $8.53 per month.

That would total a monthly bill of $29. That’s less than a third of the average monthly cable bill of $107.

The study found a number of reasons for people leaving streaming services. More than a quarter of U.S. subscribers said they had a subscription video on demand (SVOD) channel canceled because of a credit card program, and about a third of them didn’t return to the service after that. This is particularly an issue among younger adults.

“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.”

Which SVOD is faring best in terms of cancellations? The study found Netflix users are less likely than average to have canceled service over the past year, while Hulu users are slightly more likely. Amazon Prime Video subscribers are no more or less likely.

The top two reasons for terminating service are that people didn’t find the service a good value for their money and they didn’t find enough content they liked—which explains why Netflix is spending so darn much on content.

Content is the most important part of consumers’ decision-making on whether to keep subscribing to an SVOD. The study found the top reason people stick with a service is the interesting content. The ease of finding something they liked to watch was the third reason given, with interesting original content fourth and lots of new shows fifth.

Download the nScreenMedia study: Keep My Customer – Why Consumers Subscribe to, Stay with, Cancel, and Come Back to Online Video Services