Free trials often end up to Subscription

Published May 3rd, 2017

Nearly one out of three people who try out a video-streaming service during a limited free period end up subscribing, according to new research by Parks Associates.

While spending on transactional services has declined, average monthly spending on subscription OTT video has increased, reaching $7.95 per U.S. broadband household in 2016.

 

Most households build their services around at least one of the top three services, Netflix, Amazon, and Hulu, which also show among the most effective trial conversion rates.

“Free OTT trials are effective in converting a sizeable portion of trial users into subscribers,” Glenn Hower, Senior Analyst, Parks Associate said. “There is a potential for free trial abuse, but only roughly 1% of consumers are ‘serial trialers’ who abuse free trials to avoid paying for services. Most consumers use trials for their intended purpose of trying out a service before deciding whether or not to continue as a paid subscriber.”

According to Parks, more than a fourth of US broadband households tried out at least one online video service in the last six months with a free trial. Of these, 47 percent subscribed to at least one trial service after the free period expired.

Source: Parks Associate

What Does ‘Watching TV’ Really Mean Anymore?

A new report suggests that Gen Z is a native digital video generation that overwhelmingly equates “watching TV” with an online source. Analysis of the survey from Tremor says they also may be the first to fully embrace digital video advertising by seeing ads as indistinguishable from actual TV shows, and they will lean heavily toward connected TVs. The study is based on an online survey administered to 1,020 respondents ages 14-50 in March of this year by the Center for Generational Kinetics. At The Center for Generational Kinetics, we call the generation after Millennials "Gen Z or iGen.” This corresponds within their research defining them as cloud natives rather than digital natives; their world is “iEverything,” with a lowercase “i.” Other popular names for this fast-emerging generation are Generation Z and Centennials The study suggests the term “watching TV” now holds a different meaning for many people with 84 percent of adults aged 14-50 surveyed equating “watching TV” with devices such as an Apple TV or PlayStation. Specifically, 70 percent of Gen Z consider watching TV through an online source, whereas 74 percent of Gen X consider watching TV to be through traditional cable or satellite services. “The transition of television programming to a digital, streaming-first culture has been happening at a rapid pace,” Karen Ring, senior director, insights and analytics at Tremor Video, observes. “Gen Z, who in two years will make up 20 percent of the workplace, is in a prime position to create an inflexion point in favor of online consumption.” The data suggests Gen Z respondents are 40 percent more likely to watch multiple episodes of TV in solid, focused chunks, much like reading chapters in a novel. More than half of those surveyed said they prefer to stick to a single show until they finish the series, rather than intermix shows. Additionally, a majority (54 percent) of Gen Z respondents said that they either don’t mind or enjoy watching ads, compared to smaller portions by Millennials (45 percent) and Gen X (43 percent). While the youngest generation claims to watch less TV than their parents do, they still have a low tolerance for a heavy ad load.   Source: CED Magazine