Streaming services are slowly finding it harder to retain subscribers as consumers weed out services they don’t need for a while in a crowded marketplace.
About 19% of subscribers to premium services like Netflix, Hulu, Apple TV+, HBO Max and Disney+ have canceled three or more subscriptions in the last two years, according to new data from Antenna. This is more than 6% for the biennium ending June 2020.
According to Antenna, the average U.S. premium streaming monthly churn rate was 5.46% in July, up from 4.46% a year ago and 4.05% in July 2020.
Many households signed up for multiple streaming services a few years ago as new options hit the market, subscription prices were lower, and the pandemic boosted demand for home entertainment. Slowly but surely they are becoming more selective and frugal.
Some consumers cancel their subscription when a popular service or show they want expires, and then switch to another service that has something else to offer. Among the people who have canceled multiple subscriptions, a significant proportion are “trade show” enthusiasts, says Jonathan Carson, co-founder and CEO of Antenna. “They come, they look, they unsubscribe and they leave.”
Many lose interest in a particular platform when their favorite content is no longer available on the platform, or simply want to cut entertainment costs. The pressure on the wallet due to the economic downturn can make people even more frugal.
Customer churn is a key reason streaming players like Netflix or Walt Disney, which runs Disney+ and controls Hulu, are having trouble expanding their customer base. Netflix lost almost a million customers in the last quarter.
According to Antenna, the percentage of Netflix customers who signed up in January and remained subscribers six months later fell to 55% in 2022, compared to 62% in the same period in 2021 and 71% in 2020. Longtime customer loyalty has also declined, with people who had a Netflix subscription for 2-4 years accounting for 18% of cancellations in the second quarter, up from 13% two years ago.
When discussing merging HBO Max and Discovery+ content into one streaming service, Warner Bros executives said having a wide selection of content is important to reduce customer abandonment. “Combining all the content was the only option capable of keeping this business viable.”
YouTube has also made an attempt to consolidate streaming services on the same platform.
YouTube plans to create a one-stop shop for subscriptions to popular streaming services
Source: The Wall Street Journal
