The last two years have seen a major shake-up within the streaming industry. Netflix dominated the market for years, sitting atop the industry it essentially created, although, the introduction of heavy-hitters such as Disney+, Apple TV+, and HBO Max has drastically altered the streaming landscape. With so much competition streamers are now prioritizing customer retention, and it is no easy feat.
Despite subscriber losses at Netflix, streaming is showing no signs of slowing down. In 2018, the average viewer used three different TV sources, but a global pandemic and the launch of several new streamers significantly pushed that number to seven sources.
As the pandemic has improved and society has reached some semblance of normalcy, streamers are now competing for a pool of disposable time that is similar in size to that of 2018. Although the most significant difference is that in 2022, Netflix now has to compete with the likes of Disney+, HBO Max, Apple TV+, Hulu, Paramount+, Peacock, and more.
As more and more platforms hit the market, all services are faced with figuring out the best way to retain their existing subscribers. The introduction of new streamers has led to services losing licensing deals with several studios, each saving their best content for their own platforms. This has caused a situation where customers must almost constantly rethink what streamers best suit their viewing tastes.
Hub’s 2022 Best Bundle Study showed that 33% of consumers plan to add a new subscription to their list of memberships within the next six months, 21% more than in 2021. While that sounds positive to streamers, the number of people expected to cancel a TV subscription rose from 22% to 30% between 2021 to 2022.
Samsung's white paper revealed in March that viewers blame a lack of new and original content when it comes to retention. Thirty-nine percent of respondents to the company’s “The Streaming Index” said they would unsubscribe from a service that lacked original content, with 36% of churn caused by a lack of new content.
The rate of churn among streaming platforms has risen from 40% to 45% from 2020 to 2022. Deloitte Global has previously voiced fears that churn will eventually lead to 150 million SVOD cancelations just this year.
“That’s the bad news,” said Ariane Bucaille, global technology, media, and telecom industry leader for Deloitte. “The better news is that, overall, more subscriptions will be added than canceled, the average number of subscriptions per person will rise, and, in markets with the highest churn, many of those canceling may resubscribe to a service that they had previously left. These are all signs of a competitive and maturing SVOD market. As SVOD matures, growth across global regions that may have different cost sensitivities will likely require different business model innovation and pathways to profitability.”
Consumers are well aware of their current options and seem intent on flocking to whatever platform is currently offering the next “Squid Game” or “WandaVision.”
In all likelihood, consumer retention will continue to be a challenge to streamers for years to come, especially if new platforms continue to launch and/or companies move their focus from traditional TV to streaming. Streamers will be putting their best efforts toward creating content that viewers want to see, which can only be good for the consumer, but it means that platforms must keep turning out hits to keep their subscribers from seeking entertainment elsewhere.