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Streaming Trends to Watch: Increased Churn, More Smart TVs, Multiple Theatrical Windows

Lauren Forristal

If there’s a constant challenge in the streaming industry, it’s that subscribers will continue to churn and streamers will spend billions to get them back. Parks Associates’ 2022 “OTT Streaming Trends to Watch” white paper shows the average churn rate was 40% in 2020. Today, the average is 45%.

Churn is the New Normal

As streaming services continue to boast free trials and zero contractual obligations, consumers will switch between them more frequently and easily, further increasing churn rate in 2022. Today’s streamers typically subscribe to one or more giant streaming services like Netflix, Disney+, Hulu, Amazon Prime Video, Apple TV+ or HBO Max as well as three or more additional services like Paramount+ and Peacock which have less original and widely consumed content.

It’s common for viewers to hold on to the services that they use the most and jump from others for specific series like “Ted Lasso” for instance, then canceling when they are finished. Because of this, the number of subscriptions may rise and fall over time, normalizing churn in 2022.

All OTT service providers will need to adapt their performance metrics and their approach to retention to address this present reality. Regardless of their revenue model, streaming services need to be proactive in efficiently engaging and retaining customers whether that be more enticing content offering, a thorough UX, as well as a price point that is proportionate to the service’s value.

We’ve recently seen Apple TV+ and Peacock have the highest churn among all streaming services, while Netflix and Disney+ are doing the best at retention.

No More Hybrid Windowing?

Eric Sorensen, senior contributing analyst at Parks Associates says, “We expect the traditional business models for movie windowing releases to erode more in 2022… The box office will regain some of its strength, as ‘experience’ releases like sci-fi and action-adventure will continue to draw people to the theater, but for many films, movie studios generally benefit from bypassing exclusivity and releasing through multiple channels, including theaters and direct-to-consumer. In 2022, we will see more of this hybrid windowing strategy and experimentation.”

Movies that aren’t already a franchise, especially non-superhero films, struggled to draw audiences to the theaters. “Spider-Man: No Way Home” was definitely the biggest hit of the year and the second-largest domestic opening in history, it collected $260 million in its first weekend of release in both the United States and Canada. In retrospect, Spielberg’s “West Side Story” and Guillermo Del Toro’s “Nightmare Alley” were among the critically lauded films that hardly registered at the box office.

It’s not news that the COVID-19 dilemma has led film studios to reconsider how, when, and where new movies will be distributed. As movie theaters shuttered, streaming services benefited from this shift in content windowing. As a result, customer preferences shifted in late 2020 and early 2021 toward OTT and pay-TV providers. However, as movie theaters reopen, consumer behavior is shifting back. Parks Associates’ research finds that consumers prefer going to the cinema or watching on SVODs.

In 2022, while action-adventure releases may do well at the box office and may justify 90-day windows, other films will be a mix of direct-to-streaming, simultaneous releases, or little or no box office windowing possibilities.

Smart TVs Will Be the Default for Streaming

In the smart TV platform market, smart TV adoption in broadband homes remained consistent in 2021 at 54-56%, while streaming media players declined in the third quarter. This trend is likely to continue in 2022 and beyond.

It’s likely that smart TVs will cement their position as the default connected streaming platform. Users want all their entertainment available on a single device, and as smart TVs have become more affordable and offer improved user interfaces, they become an attractive option for viewing their favorite streaming services.

Also, using a connected TV eliminates the consumer’s burden of navigating their HDMI ports, inputs, and wires. Therefore, Roku, Google, Amazon, and Comcast are all competing in the smart TV platform market. For instance, Amazon has expanded with two product lines: the Fire TV Omni Series and the Fire TV 4-Series. The company will be a major competitive factor to watch in 2022.

Samsung’s Tizen smart TV platform is among the most widely used connected entertainment platforms in broadband households in the United States. In Q3 of 2021, 27% of broadband subscribers reported that Samsung Tizen Smart TV was their primary device.

And as smart TVs become the default, the number of standalone streaming devices will decline. Revenue from Roku’s hardware (players) division fell by 26% year on year to $97.4 million in the third quarter of 2021.


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