Churn Analytics

Recent report* on M& E industry reveals that there are around 1-1.5 million “digital only consumers” in India today, who do not normally use traditional media. This customer base (is expected) to grow to around 4 million by 2020 and generate significant digital subscription revenues for the media and entertainment (M&E) sector. Tactical digital consumers — who consume both paid television (cable and DTH) and have at least one OTT (over the top) subscription (like Netflix, Hotstar or Amazon Prime Video), on the back of digital and micro-payment systems being rolled out in the country, will reach as high as 20 million households by 2020, from 6 million now. By 2020, the segment of consumers that consume traditional media (either pay or free) and free OTT content is expected to cross 500 million. Overall, the M&E industry is poised to touch $31 billion by 2020.

*Source: ‘Re-imagining India’s M&E sector‘ published by EY & FICCI in March 2018

Given the massive increase in the consumption of digital media, one of the most critical problem of the industry is to ensure that the existing paying customers do not leave the organization and the revenue leakages could be prevented.

Customer retention is always a far more profitable strategy than customer acquisition as a recent report by Frederick Reichheld of Bain & Company** projects the cost of customer acquisition to be seven times that of customer retention:

  • Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer
  • Over a 5-year period customer attrition rates could reach as high as 50%
  • Businesses which boosted customer retention rates by as little as 5% saw increases in their profits ranging from 25% to a whopping 95%.

**Source: http://www.bain.com/Images/BB_Prescription_cutting_costs.pdf

Customer churn refers to when a customer ceases relationship with a company.

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