ReA split between DTC-model growth & churn story, and the MVPD -model growth & churn story

Argument: Cord-cutting has empowered top OTT streaming services owned by MVPDs, or MVPDs owned by companies with OTT streaming services (Disney), and that has created a different dynamic that is now playing out in the streaming marketplace. Effectively, this dynamic is the DTC-model growth and churn story (Netflix, Hulu, and Disney+), and the MVPD-model growth and churn story (HBO Max, Peacock).

Four models:

1. DTC Growth, no churn

No other streaming service discloses churn, most likely because Netflix set the standard a decade ago.
All OTT streaming services with a focus on DTC business models (Netflix, Disney+, Hulu) are going to be opaque on churn. Given the similarity of the metric for MVPDs, they will continue to be opaque until market conditions force them to do otherwise.

2. MVPD higher churn than growth

What makes churn for MVPDs in 2020 a different story than churn for streaming services is because the churned video consumer can be monetized another way within the MVPD’s broader ecosystem: churn from video-only accounts can convert into growth as broadband-only service adds, and/or wireless service adds.
That detail is effectively the difference between a DTC-growth strategy for an OTT SVOD, and a portfolio of wholesale and retail for growth.

3. Retail & wholesale standards of growth, and churn

Churn for DTC services like Netflix is almost entirely a function of their ability to manage the customer experience and customer relationship. But for HBO Max and Peacock, wholesale distribution deals put other MVPDs like Cox Communications and Charter (Peacock), or retail outlets like Hulu and Amazon Channels, in between them and the customer. Those deals shift the burden of churn away from those latter OTT SVOD services.

4. Growth and churn metrics buried in subsidiary business divisions

Neither Apple’s and Amazon’s model of streaming services as marketing tactics fall into either bucket of DTC streaming services or MVPD-owned businesses.

Conclusion

The key takeaway from all this is MVPDs have become surprisingly sophisticated sources of growth and churn across the streaming marketplace.
Emerging services want to offload the risk of churn, either through broad portfolio approaches to distribution or through partnerships with other MVPDs.

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