May 3, 2017

Free trials often end up to Subscription

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

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