Consumers Continue Cancelling Streaming Services
As streaming services like Netflix and Disney+ raise prices even further, more customers are choosing to cancel their subscriptions.
Premium subscriptions saw a rise in cancellations of 6.3% in November, compared to 5.1% a year earlier.
Over the last two years, around 25% of consumers subscribed to Netflix, AppleTV+, Paramount+, Prime Video, Disney+, Hulu, Max, and Peacock, cancelled their subscriptions to at least three of the above.
This increased 15% before price hikes raised the ad-free monthly costs.
One US subscriber, Crystal Revis said, “With the streaming services increasing their rates like they are, it’s like: ‘OK, do I pay for the cable?’”
Streaming companies have been pressured to improve their profitability in order to offset high costs of creating and licensing content, without the need to reacquire subscribers.
Some tactics have included launching lower cost ad-supported tiers, partnering with rivals on deals, and providing discounts or free months.
Crystal Revis has already cancelled Disney+, and Paramount+, and had plans to also cut her Hulu subscription. However, she chose to keep it as the service offered six months of its ad-supported service for a cheaper price per month.
Consumers have said the reason behind downgrading was to keep personal expenses down.
Another US consumer said, “I’m focusing on the ones that me and my family watch the most.”
This customer explained he switched from a premium Netflix plan to a standard plan, which limits the number of devices that can connect to the service, as well as lowers the viewing resolution.
He also cancelled the sports add-ons to his YouTube TV subscription during the months his favourite teams weren’t playing.
Antenna, an analytics firm, said a lot of customers who cancelled services, returned when more appealing content became available.
“Retention doesn’t just mean holding on to a new subscriber the first time they get them. It’s about managing a relationship over a true customer lifetime.”
The cheaper ad-supported plans provide services a way of bringing in new customers, as well as winning back old ones.
It was reported that among US customers who joined Disney+ for the first time last November, or converted from a trial, almost 60% chose the ad-supported tier.
Black Friday promotions boosted this, and it was up from 25% in December 2022.
For Netflix, one third of new US customers in November chose the ad-supported tier, compared to 11% a year before.
In another attempt to bring in more customers, other companies started offering bundle deals, which included ad-supported tiers from Netflix and other streamers for a cheaper price.
While this technique does provide better value, customers are wondering whether the content on the services is worth the price.
Another US customer, Brendan Byrne, pays for multiple streaming services including Netflix, Disney+, ESPN+, Hulu, Prime Video, and Paramount+, in addition to paying cable. He is starting to question the value of some subscriptions.
Following last year’s Hollywood writers and actors strikes, he said “the lack of content is evident across all of these streaming things right now.”
“We’ll cut back on a few of them. We’re just not using them.”