Streaming services are seeing increasing churn as “serial destroyers” look for value for money
by JANAE BOWENS | The National Desk
Tuesday, January 2, 2024
FILE – Many Americans are deciding whether to stick with cable TV or switch to streaming services. (Photo: FOX26)
WASHINGTON (TND) – Data shows Americans are dropping some of their streaming services.
Antenna, a subscription analytics company, estimates an increase in monthly churn, or subscription cancellations or expirations.
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In November 2022, the monthly churn rate for major streaming services, including Apple TV+, Discovery+, Disney+, Hulu, Max, Netflix, Paramount+, Peacock, and Starz, was 5.1%. In November 2023, the churn rate increased to 6.3%.
Churn rate is the rate at which customers stop doing business with a company, according to Investopedia. For example, the rate at which customers cancel their subscriptions.
Antenna's research is based on various transaction-based data sources.
According to the Wall Street Journal, about a quarter of U.S. subscribers have canceled at least three of the major streaming services in the past two years.
Two years ago, that figure was 15%, a sign that streaming users are becoming increasingly fickle.
“We're actually seeing this cohort of consumers that we call 'serial churns,'” explained Brendan Brady, Media & Entertainment Lead at Antenna.
Antenna defines a serial churn as someone who has canceled three or more services in the last two years. Experts say these people now make up a quarter of streaming services.
In the premium subscription video on demand (SVOD) category, one in four cancelers typically re-subscribe to that service within four months. one in three within seven months; and every second person within two years.
Consumers are no longer forced to be loyal.
Roshanda Pratt: “How many streaming services do I have? How many fingers do we have? Seriously? “We’re on Peacock, Hulu, Amazon, Apple TV,” said Roshanda Pratt, wife and mother of three. “The list goes on and on.”
Pratt is trying to limit the use of streaming services because the fees add up, but her efforts are off to a rocky start.
If there's any parent out there with teenagers, you know there was an immediate eye roll and the thought: Can we really do this?
Pratt added that streaming is convenient and admits it doesn't do anything, but now the pressure is on the services.
“The people we're buying the streaming product from now have to give us something that's worth streaming, not just a movie that's coming out,” she explained.
Brady said if people continue to cancel subscriptions at high rates, we can expect to see a lot more bundle offers and promotions from streaming services aimed at retaining and acquiring customers.
Dan Rayburn, an expert in streaming and online video, said the actual numbers about how many people are leaving streaming services are unknown because companies don't release that data. However, it is clear that companies are still working to benefit from this new model.
“Netflix forecast free cash flow of $6.5 billion last year. “So Netflix is profitable now, but look how many years it took them to get to this size and scale,” Rayburn noted. “We all also see that prices on all these streaming services are increasing every year. So it is a very challenging and complex business. The cost of producing and licensing content is their biggest expense. That's why we're watching very closely which streaming services can get profitability and how quickly.
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