Streaming services have boomed during the pandemic as people have been forced to spend more time at home. After lockdown restrictions were lifted, Britons canceled about 1.5 million subscriptions in the first three months of 2022, around 500,000 more than in the previous quarter. More than a third did so to save money, according to a new report by media consultancy Kantar. Rising inflation in the UK – hitting a 30-year high of 7% last month – has forced many households to cut non-essential spending, and subscriptions to video streaming platforms are firmly in the firing line.
“Households are beginning to prioritize where and how their disposable income is spent,” the report said.
Kantar’s report showed that the number of UK households with at least one subscription fell by 215,000 over the quarter, with a record 38% of customers also planning to cancel subscriptions over the next three months due to money concerns.
“The proportion of consumers planning to cancel [subscription video on demand] Services and stating the top reason to save money rose to an all-time high of 38%, up from 29% in Q4 21,” the report said.
According to the UK Office for Budget Responsibility, rising energy and food prices are expected to reduce disposable household income by 2.2% per person over the next 12 months. This is the largest drop in living standards since 1956, when government records began.
Dominic Sunnebo, global insight director at Kantar’s Worldpanel division, said the latest numbers are “sobering” for streamers.
“The evidence from these results suggests that UK households are now proactive in finding ways to save and the SVOD market is already seeing the impact of this,” he said.
Viewers turned away from Disney (DIS) much faster than Netflix and Amazon (AMZN) as churn tripled quarter-on-quarter to hit 12%.
Kantar estimates that Netflix — the world’s largest streaming platform — has around 12 million subscribers in the UK, accounting for between 5% and 6% of its global subscriber base.