Are Streaming Services Experiencing a ‘Loyalty Crisis’?
Are Streaming Services Experiencing a ‘Loyalty Crisis’?
The problems facing streaming providers are hardly new; in a sense, they’re the same issues every business that has to compete in a crowded marketplace face. There are only so many customers to go around, and creating a business that stands apart from the competition is difficult. But, a new report from Samsung Ads highlights the problems that streaming operators have through a new lens: that of “super-loyal” customers, who are hard to acquire but devote most of their viewing time to just one streaming service.
Key Details:
- Samsung finds that the majority of customers using its smart TVs are “super loyal,” watching one app for the majority of a 10 to 12-month span.
- A mere eight of the top 20 streaming apps measured by Samsung have a super loyal customer base of more than 25%.
- Almost 20% of the total audience is not loyal to any app, making them more likely to be at risk of churn.
Click on the graphic to enlarge it and read all of the stats.
To start with some good news, Samsung found that among users of its smart TVs, almost three-quarters of their time spent watching the set is spent on streaming services. Linear TV viewing makes up just 29% of total TV time on Samsung smart TVs, but the behavior of customers while using streamers is much less predictable.
Samsung’s report points to an argument that Netflix has increasingly been adopting: subscribers don’t necessarily equal usage. That’s part of the reason Netflix will no longer report subscriber totals starting in 2025; customer engagement metrics, such as how long a customer spends watching a particular service, will take precedence as streaming penetration reaches full maturity.
The new Samsung Ads study hones in on this point, showing that 64% of streaming viewers on its sets are “super loyal” customers, meaning that they are active in a single app for a 10 to 12-month period. Another 8% of audiences are semi-loyal, or active within the same app for between seven and nine months. Super loyal audiences make up 96% of the total streaming time observed by Samsung between August 2023 and July 2024.
These super-loyal subscribers make up the largest audience segment for Samsung, but they are only loyal to an average of 2.6 apps each. In other words, they’re watching the same two or three apps over and over again instead of cycling through multiple apps constantly. Gathering super-loyal customers is difficult; of the 20 apps measured by Samsung, only eight have a super-loyal audience that comprises more than 25% of their total viewership.
Will Investors Stop Caring About Subscriber Totals Soon?
Samsung’s report shows that there are still some customers that could be converted into super-loyal ones. Seventeen percent of Samsung smart TV audiences used in the report were not loyal at all and stood the best chance of churning away from chosen streaming apps at any given moment. These customers present an opportunity to streamers that need more super-loyal audience members.
But Wall Street investors may not care about raw subscriber totals any longer. These are a good metric for determining how much money a streamer can potentially bring in, but they also don’t say much about how much time a customer spends with that service, which in turn offers insight as to how likely they are to cancel their subscription. It’s easier to make money from ongoing customers than from new ones, and investors may start favoring streamers with more steady subscriber bases over ones that simply bring in a horde of new customers every quarter.
That’s one reason why streamers who don’t share viewership data the way Netflix has started doing may not have a choice for much longer. In th future, they may have to go a little further into their loyalty numbers to show investors that they can keep customers engaged for the long haul, not just when a buzzy new show or movie is coming out.
The latest report from Samsung Ads puts this fact in stark relief. Streamers cannot simply be focused on gaining subscribers any longer; they have to work harder to convert occasional visitors into super-loyal customers if they want to stay in business for the long term.
Netflix
Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”