Churn Update: 70% Use Streaming Apps for Just Three Months

• by Karlene Lukovitz  @KLmarketdaily, 10 hours ago

On average, more than 70% of U.S. smart-TV viewers use streaming apps for three months or fewer — and apps showing the lowest time spent per month have the lowest retention periods. 

That’s according to the latest churn trends analysis from Samsung ads, based on data from the brand’s 70 million opted-in U.S. smart-TV user base over the 12 months of 2022. 

A test campaign included in the report demonstrated that advertising targeted to light monthly users can reduce churn significantly. 

The analysis looked at active streaming behavior by month across ad-free subscription-based (SVOD) apps, ad-supported (AVOD) apps, and apps offering both an ad-free and ad-supported subscription tier (HVOD). Months of active use did not need to be consecutive — for instance, if app users were active in January, March and November, they would be classified as showing three months of active use. 

The top 15 apps by number of monthly active users — dubbed Tier 1 apps — saw “stickier” behavior than average: Nearly half of their viewers were active more than three months out of the 12 analyzed. 

But even for the most successful streaming apps, retention is challenging: Just 30% of their users were active more than half the year (seven months or more). 

Outside of the top five most-used apps, loyalty is hard to come by. While one-quarter of viewers of the top five apps within the Samsung ecosystem were active for more than 10 months of the year, this dropped to just 11% for apps ranked six through 20. 

“This suggests that users of most apps either quickly lose interest in an app or binge a specific piece of content for a brief period and then churn out,” notes the report. “Time-spent data support this hypothesis.” 

Across all apps, regardless of number of monthly active users, monthly time spent and number of months active in an app were found to be directly correlated: More time spent on a monthly basis goes hand-in-hand with more months active. 

Across Tier 1, 2 and 3 apps, monthly time spent was more than double for users who were active in the app for seven or more months in a year versus those who were active for six months or fewer (chart top of page). 

The current analysis also updates Samsung’s tracking of its Churn Ratio — a summary metric representing the number of users who have used an app in the five to 12 month period prior to the current month, but not since, divided by the active user base of that app for the current month. 

In its last paper on streaming retention, it reported that the Churn Ratio across apps on Samsung TVs reached 7.0 in Q3 2022, meaning that seven times as many users had churned out of the average app as were currently using it. That represented a 46% increase in churn compared to Q3 2021’s 4.8 ratio. 

Over the most recent two quarters, the Churn Ratio was found to be lower than 7.0, but still significantly higher than Q3 2021’s 4.8. 

“Competition for user loyalty remains fierce and publishers must continue to make retaining their audience a priority,” notes the report, which includes results of a test that demonstrated that advertising to light users can be an effective way to maintain engagement and reduce churn.

In the test, targeted advertising succeeded in driving light users back to an app, increasing retention by a factor of eight times.