Increasing Trend of 'OTT Nomads' Searching for Killer Content
Netflix Allows 3-Month Suspension Without Fees
As the number of video streaming service providers increases, more households are feeling the burden of regular subscription fees. Consequently, the so-called 'OTT nomads'?those who cancel their subscriptions when there is no worthwhile content and resubscribe when 'killer content' appears?are on the rise, prompting OTT companies to implement features that allow subscribers to temporarily pause their subscriptions.
The Wall Street Journal (WSJ) recently reported, citing data from subscription information analysis firm Antenna, that the number of subscribers temporarily pausing their streaming service subscriptions is increasing in the United States. WSJ stated, "A new habit is emerging among subscribers to regularly pause their subscriptions and return within a year," adding, "This habit ultimately highlights the importance of consistently providing live content such as sports events or engaging movies and shows."
Among those who subscribe to premium streaming services in the U.S., the rate of subscribers who canceled and then resubscribed increased from 29.8% (median for the month) during January to September 2022 to 34.2% during the same period this year. The average cancellation rate for premium streaming services was 5.2% as of last August, but considering resubscription, it dropped to 3.5%.
Robert Tora, an American living in Kentucky, said he basically subscribes to Spotify to listen to music alongside Netflix and rarely pauses his Spotify subscription. However, he does not maintain year-round subscriptions to other OTT services like Hulu, Amazon Prime, and Disney Plus; instead, he subscribes only when there is content he wants to watch and cancels the following month. This month, his daughter wanted to watch "Dancing with the Stars" on Disney Plus, so he subscribed but marked the schedule to cancel next month.
This pattern varies depending on the OTT service. According to WSJ citing Antenna's survey, Netflix had the highest number and share of subscribers in the U.S. who subscribed only once and maintained their subscription continuously. Warner Bros. Discovery (WBD)'s OTT service Max had 31% of subscribers who resubscribed more than twice, and among Apple TV Plus subscribers, 29% had resubscribed two or more times since 2020.
In response to this situation, OTT companies have introduced pause features that allow subscribers to maintain their subscription status without paying fees, instead of fully canceling and later rejoining. Netflix guides premium membership subscribers to pause their subscriptions for up to three months without being charged. Other OTTs like Hulu offer the same conditions. Disney Plus, which does not yet have a pause function, is reportedly planning to introduce this feature.
The increase in OTT nomads is occurring not only in the U.S. but also similarly in South Korea. According to the Korea Creative Content Agency, as of last year, 86.5% of 5,041 people aged 13 and older nationwide used OTT services. The average monthly OTT subscription fee was 12,005 KRW, and the average number of OTT subscriptions per person was 2.1. This shows an increase from less than two average OTT subscriptions per person as recently as 2022. With domestic and international OTT providers raising subscription fees to the extent that a new term, 'streamflation' (streaming + inflation), has emerged, it is expected that users will continue to cancel OTT services without worthwhile content and resubscribe later.
Jonathan Carlson, CEO of Antenna, analyzed this phenomenon by saying, "Many OTT subscribers may not subscribe forever, but at least it will become possible to turn subscriptions on and off."
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