Thursday, April 14, 2016

Customers Are Staying With Their Netflix

When it comes to churn, or subscribers that end their financial relationship with a company, keeping customers engaged and valued assures a company a strong revenue stream.  Because once you have lost the trust of your customer, it is much harder and much more expensive to try and win them back. 

In the digital media space, churn could kill a business. And folks like Netflix, Amazon, Hulu, Sirius, and HBO Now among the many others count on customers to continue to pay a subscriber fee and use their services.  Well according to a Multichannel article, "Netflix is by far the largest subscription OTT video service provider, with 52% of all U.S. broadband homes taking it by the end of last year, but it also enjoys the lowest churn rate as a percentage of its total sub base, Parks Research found in a new study focused on the over-the-top video sector."   Certainly, Netflix hopes that trend continues as they raise their monthly fee about a dollar a month. 

Many may not notice or even care.  Given the aggressive push for content aggregation and a continuous stream of original content on the service.  Tomorrow, Netflix presents a new season of Unbreakable Kimmy Schmidt as one such example.  And this summer comes another season of Orange Is The New Black.  For those fans and others eager to binge on their favorite series or to watch a movie, Netflix keeps its customers from departing.  On the other hand, one out of 5 broadband homes did drop a subscription service.  How much price elasticity can a Netflix home handle?  Netflix hopes to keep their churn low while eking out more revenue.

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