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Entertainment Media/Telecom

Big Challenge for Disney and Apple Video Services: Churn

One of the key metrics behind successful subscription services is also one of the most secret numbers: the cancellation rate. New data reveals that number can be as high as 23% a month, a vivid illustration of the challenges for companies planning to offer new video services, which range from Disney to Apple to AT&T’s WarnerMedia.

Overall, subscription on-demand video streaming services lose between 7% and 23.4% of their subscriber revenue every month because of people canceling, according to data from ProfitWell, a software firm that works with a wide range of subscription services. The median percentage of this so-called “churn rate” is 8.9%. In comparison, in the news media, the median rate is 5.7% (see above chart).

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