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Report: Nearly 66% of Streaming Customers Canceled a Service Last Year

David Satin

With the global COVID-19 pandemic winding down, many around the world are re-discovering what it means to gather with friends, be in public, or simply go outside again. The pandemic caused many disruptions to daily life, and instigated a lot of changes. One such change was the proliferation of streaming services. With nothing else to do, many turned to streaming TV to chase away the boredom and anxiety of lockdowns.

Streaming content providers are going to need to think of a new way to lure customers, however. That’s according to a survey from Blue Label Labs, which showed that a whopping 65% of respondents canceled at least one streaming service in the last year.

That’s a big jump from a different survey earlier this year which showed over 25% of U.S. households had cut a service. Subscription fatigue is not only real, but inflation appears to be accelerating it.

According to the research, Prime Video bore the brunt of that fatigue over the last year. Although it is the second-most popular service behind Netflix, according to the survey, it was the most-canceled service among those who said they dropped a streamer in the past 12 months.

The higher cancelation rate among Prime Video members is likely due not only to less pandemic viewing, but also to fewer customers endlessly browsing Amazon for items to keep them entertained during lockdowns. Amazon does not release Prime Video subscriber numbers, but its 220 million Prime members make it one of the only services that can stand up next to Netflix’s 221 million.

Lack of use is the most common reason subscribers canceled a subscription. The average domestic customer subscribes to between four and five services, but there simply aren’t enough hours in a day to stream that much content. Customers tend to stick with a single show and watch it through rather than forcing themselves to pick between several shows on different services in a given day.

Cost was the second most popular reason for canceling. According to the research, the most common total streaming budget people reported was between $15 and $30 per month. Fifty-three percent of respondents said that they were satisfied with the amount that they were paying for streaming, while 47% said it was too much.

The survey also confirmed a trend that shows that people who think streaming is too expensive are willing to put up with ads to bring costs down; 49.3% of respondents to the survey confirmed they’d take more ads to pay less.

It also confirmed a trend that older demographics who grew up with ads on TV are more likely to accept ads on streaming. Sixty-two percent of Gen-X TV viewers reported being just fine with ads.

Finally, the survey dug into what customers are doing instead of spending time on streaming platforms. They found that YouTube, Instagram, and TikTok were the most popular places to absorb free digital media outside of streaming television.

The survey did not take free, ad-supported streaming TV (FAST) into account, but many customers are increasingly turning to FAST channels to fill in the gaps in their entertainment portfolios. 60% of U.S. households watch at least one FAST channel, and with more of them popping up every day, that number is likely to increase.

The decline of linear TV and the rise of streaming is a shift that cannot be reversed. Even with customer churn on streaming services increasing, cord-cutting will continue to be the dominant trend. But until streaming services can agree to aggregate and form larger cross-company streaming bundles, they’ll continue to see numbers like those reflected in Blue Label Labs’ survey.

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