The global OTT streaming industry is currently dominated by Netflix, Amazon Prime Video, and Disney+ platforms. These platforms strive to deliver the highest-quality new movies and series to their viewers. However, a recent development has revealed that Amazon’s video streaming platform is grappling with a mountain of catalog errors, which in turn are impacting its customer retention.
Internal documents obtained by Business Insider highlight various catalog errors on Amazon’s video streaming service, including issues such as missing episodes, inaccurate translations, and incorrect titles. These errors have caused considerable frustration among viewers, hindering their ability to enjoy shows seamlessly.
According to the documents, a substantial 60% of Prime Video customer complaints in 2023 were related to catalog errors. A significant portion of these complaints, totalling about 10,000, were specifically related to “season integrity” issues, such as missing episodes, inconsistent playback options, and incorrect content availability.
Moreover, there have been instances where content was misplaced on the wrong localized page, which is intended for specific geographic regions. This has resulted in a noteworthy 20% increase in viewer disengagement, highlighting the negative impact of these catalogue errors on user experience and engagement.
However, a source familiar with the matter informed Quartz that the leaked documents are outdated and that customer engagement did not drop solely due to catalog errors.
Response to Catalog Errors: Amazon’s Initiative
To reduce customer complaints and enhance the overall streaming experience, Amazon has taken steps to address catalog errors on the Prime Video platform. The company is reportedly investing in developing software capable of proactively identifying known customer defects, especially those related to inconsistent or incomplete seasons, as detailed in the Business Insider documents. The Prime Video team anticipates that this initiative will contribute to a reduction of 15,000 complaints per year.
In 2023, Amazon’s spending on video and music services increased 13.9% YoY to $18.9 billion. This spending includes licensing and production costs associated with content offered in Amazon Prime memberships, as well as costs related to digital subscriptions and content sold or rented.
In contrast, Netflix has repeatedly spent $12.6 billion on streaming content in 2023 (lower than anticipated due to strikes) and is targeting $17 billion for 2024.
Rising Churn Rates in the US Streaming Industry
Streaming analytics firm Antenna’s findings reveal a significant challenge facing US video streaming services: increasing churn rates. As a result of this growing churn rate, only three video subscription services – Netflix, Hulu, and Discovery – have ever managed to achieve profitability.
Despite gaining a substantial number of new subscriptions in 2023 (164.7 million gross subscriptions), streaming platforms also experienced a high number of cancellations (140 million). This resulted in a net increase of 24.2 million new subscriptions for the year.
Over the last four years, the weighted average churn rate in the Premium SVOD (Subscription Video on Demand) category has nearly tripled, reaching 5.5%. This upward trend indicates a growing problem for video streaming services, as retaining subscribers becomes increasingly difficult amidst competition and evolving consumer preferences.
It would be interesting to see how OTT video streaming platforms, such as Netflix, Amazon Prime Video, and Disney, can effectively differentiate themselves and retain subscribers amidst growing competition and evolving consumer demand for high-quality content. Which is your favourite OTT platform and why? Let us know in the comment section below!
