Average Monthly Entertainment Spend Drops by $13; Cost is the Leading Reason for Streaming Cancelations

It’s become increasingly obvious that customer budgets only have so much wiggle room for entertainment. Rising streaming subscription prices have left many feeling that stacking subscription video-on-demand (SVOD) services is no better from a value standpoint than buying a cable plan, and a recently released report from TiVo about video trends found that in 2023, average monthly spending on video dropped by about $13 as customers decided which streaming services to prioritize.

• Audiences are using an average of four non-paid streaming services each, nearly doubling from 2021.
• Cost is the most-given reason for canceling a service, with 21.3% of respondents saying they had ditched a streamer because of price concerns.
• A surprising 63.7% of respondents to TiVo’s survey identified themselves as cable revivers.

TiVo’s report indicates that viewers’ willingness to watch content with ads is rising. Ad tolerance is at an all-time high, with 62.8% of respondents saying that they’ll accept ads with their content. This is also reflected in the number of non-paid, ad-supported streaming services viewers are using; TiVo reports that the average number of such services in use per customer has risen to four, substantially up from the 2.4 ad services per customer in use in 2021.

The gap between users adding and canceling SVOD services has decreased by 4.4 percentage points, and audiences are now leaving streamers behind almost as often as they are purchasing new subscriptions; 20% of respondents said that they felt they had too many services already. The leading reason for canceling a service is cost, with 21.3% of respondents saying that they had churned away from a service due to financial considerations. TiVo’s data gives more context to a recent report from Antenna, which found that the churn rate had risen 300% in the past four years.

The TiVo report also had a surprising blush of good news for cable companies. It found that 63.7% of respondents were so-called “cord-revivers,” or customers who have resubscribed to a cable plan in the past six months. More than a third (33.8%) of this cohort said they could not find all the content they wanted outside the traditional cable bundle.

What Lessons Can Streamers Take from TiVo’s Data?

One big lesson that streaming providers can take from the TiVo data is that they may want to start offering their cable channels directly to consumers more often. Disney, Fox, and Warner Bros. Discovery are teaming up in a streaming joint venture that will carry 14 of their collective networks at a price likely to be around $50 per month. Creating similar channel bundles at equivalent price points would allow channel owners to give customers a viable alternative to cable, potentially providing various types of channels and helping viewers feel like they have access to a satisfactory level of content.

Another lesson from TiVo’s numbers is that services without free streaming options may want to think about creating them. The increasing adoption of ad-supported services like Tubi and Pluto TV, along with the all-time-high for ad tolerance among audiences shows that streamers like Disney+, Hulu, and Max that don’t offer free streaming counterparts have an opportunity to create such services and bring eyes to their content. These companies get to collect ad revenues from such customers, and have the chance to upsell them to paid services as well.

For cable companies, the lesson is to capitalize on the willingness of customers to return by making sure plans have as much value as possible. This could lead to the spread of carriage deals resembling the pact between Disney and Charter Communications, first struck in September 2023. The agreement gives Spectrum TV customers free Disney+ Basic accounts, and some also get access to ESPN+. Charter still lost more than 1 million subscribers in 2023, but its declines were far less than Comcast, and it’s now the largest cable provider in the United States in terms of customers.

The new study from TiVo is yet another data point that proves streaming costs have risen past the point at which customers feel comfortable stacking unlimited services. Viewers are turning to ads more often to save money, and are even willing to go back to cable if they feel they cannot get the variety of entertainment they need from SVOD services.