Churn

 What is Churn?

Churn is the number of users who stop using a service within a given time period. Churn rate is the percentage of users who stop using a service within a given time period.

For SVOD platforms, churn rate measures the rate at which customers cancel their subscriptions, resulting in a drop in subscription revenue. For AVOD platforms and FAST channels, it measures the loss of viewership, resulting in a reduction in ad revenue.

Why is Churn important?

High churn rates lead to revenue loss and hinder the growth of a platform or channel. By actively monitoring and addressing churn, streamers can identify ways to improve user retention and profitability.

How to calculate churn rate

The formula for calculating churn rate is: 

(Number of users who discontinued their subscription or stopped engaging with a channel) ÷ (Total number of users during a given period) x 100

Example:

An SVOD streaming service had 10,000 subscribers at the beginning of a month, acquired 100 new subscribers during that month, and ended the month with 9,800 subscribers.

The total number of subscribers during that month would be 10,000 + 100 = 10,100. The number of subscribers who unsubscribed (churned) would be 10,100 – 9,800 = 300.

The churn rate would be: (300 ÷ 10,100) x 100 ≈ 3%

The relationship between Churn & User Acquisition

User acquisition focuses on attracting new users, and churn represents the loss of existing users. For streamers, high churn rates can undermine the investment put into user acquisition and hurt their bottom line. It is therefore crucial for SVOD platforms to retain subscribers, and for AVOD platforms and FAST channels to keep viewers engaged and generating ad revenue.

How do I address churn rates?

Streamers take a variety of approaches to mitigating high churn rates. Some of the main methods include investing in:

• Content Offering: Deliver high-quality, engaging content to keep users interested and less likely to churn.
• User Experience: Invest in user-friendly interfaces to provide an enjoyable experience for viewers.
• Pricing and Packaging: Ensure pricing structures and subscription packages align with customer expectations and deliver value.
• Data Analytics: Leverage data analytics to identify predictors of churn. This information can be used to target the right users in marketing efforts—those who are less likely to churn—as well as to take proactive measures to retain customers before they churn.
• Content Recommendations: Analyze different segments of your audience to understand their preferences and behaviors. For VOD platforms, this information can be used to personalize content recommendations to increase user satisfaction and loyalty.
• Retention Marketing: Develop targeted marketing campaigns that focus on engaging and re-engaging customers at risk of churning. These campaigns may include special offers, exclusive content, and loyalty rewards.

ContentDiscovery is Wurl’s solution to high churn rates within the streaming industry. We help streamers attract users who are a good fit for their content, engage those users, and retain them—at scale. Learn more about ContentDiscovery!