Millions of paid subscriptions to video-on-demand services (SVOD) will be cancelled this year in Africa and worldwide, with churn rates as high as 30 per cent in some markets.
The above mentioned is one of the primary findings of Deloitte’s Global Technology, Media, and Telecommunications (TMT) 2022 predictions, which were released during a virtual event.
SVOD providers’ pursuit of global viewers is igniting rivalry and catalysing SVOD churn, according to the report, which is currently in its 21st year.
It points out that corporations worldwide are launching their domestic streaming services with local content and that the increased competition is creating abundant consumer choice, which is driving churn as a result.
The term “churn” is used in the report to describe when a subscriber cancels their subscription. This can be a significant issue for SVOD providers, who may spend up to $200 to acquire each subscriber; however, acquisition costs vary by market.
According to Deloitte, as the number of SVOD services grows across the globe and the pool of untapped users shrinks, acquisition prices may rise even higher, making retention even more critical.
“As video streaming companies expand globally and corporations establish local streaming services, viewers will be spoiled with choice.”
Users in South Africa already have access to Netflix and services like Box Office and Showmax, all available through the MultiChoice platform, DStv.
“While consumers have added more premium subscriptions to obtain and keep the exact content they desire, many have been overwhelmed by managing and paying for all of those subscriptions, and they have become more cost-conscious. These conditions may drive customers to cancel subscriptions or seek less expensive ad-supported options as a method to cut costs and pay only for the content they want by adding and cancelling services as needed,” says the report.
In recent months, the VOD streaming industry in South Africa has been a hive of activity, and it is expected to continue to develop as more international players make their services available locally.