Video: What Sling Has Learned About Churn and Pay TV
Learn more about OTT churn at Streaming Media's next event.
Read the complete transcript of this clip:
Warren Schlichting: Let's talk about what we've learned so far. And by the way, we've learned it the hard way. We've run into the walls and got our nose bloodied just on logical moves that we think should work, but don't for whatever reason, or where we've gotten it wrong. So a good place to start, frankly, is how we measure the health. Now, you measure the health of pay TV typically by churn. Churn is the overriding indicator of health. It's like taking your temperature in the morning, your blood pressure, and then in the afternoon. Churn is how the traditional paid TV has been measured and what we've found is that if you have no contracts and no commitments, well churn's probably not a great measure, right? You say there's no contract, you can come and go as you like.
So, just as a quick refresher course, churn is a pretty simple concept. And the fewer people that leave your service, the better off you are. Look we made it incredibly easy for people to come and go, and you know what happens when you do that? They do. They come and they go. No big surprise there, but it was kind of a surprise, right? We were like walking backwards into the future, going well we're gonna fix all these problems, but on my God, there they go, right? So we're just getting out of that idea where hey we got a customer, yay, right? Oh we lost a customer, well that's awful, that's called churn. And where we're headed now is to actually embrace that sort of behavior.
So traditionally the biggest drivers of people leaving paid TV were cost and the seasonal nature of programming. So do these things still hold true? Absolutely and you know what we find, the volatility is even greater right? Football season's over, you see greater volatility at the beginning of football, you see people coming in, greater volatility at the end of football with people leaving.
Cost. Does that matter? One hundred percent, right? So the short answer is yes, a lot of the same things apply to live streaming TV but there are other factors at play and factors that you may not think about immediately. You know when you look at some of the early pressures around churn with new competitors, you look at platform stability. And I'll tell you one of the most interesting things that we've come to respect about old paid TV is that it works. It just works, right? If you think about going from the snowy 19-inch screen, I can't believe we ever watched TV on that, and over the air, coming in and out to 30 years later where you've just got this incremental ... over time, those improvements have been incremental and small, but we've all come to expect pretty good stability.
So streaming services frankly, just being honest here, they have a ways to go.
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