Report: 22% of Americans Canceled a Streaming Service in Past Three Months; Most Churn Due to Price Concerns
The world may not be gripped by inflationary pressures at the same level that it saw in 2022, but American consumers still have an eye on their budgets. Entertainment is usually thought of as one of the most dispensable monthly expenses, and the ease of canceling subscription video services usually means that those end up on the chopping block first.
DIRECTV partnered with the consumer insights platform Suzy to help quantify the number of American users who had canceled a streaming service in the past three months. The data showed that more than one in five participants (22%) in DIRECTV and Suzy’s focus group said they had ended a streaming subscription like Netflix or Max in that time period.
For those consumers, price was the biggest factor in determining whether to cancel a subscription. Thirty-five percent of respondents noted that they weren’t spending enough time on a service to justify the cost. The second-most popular reason given for canceling was that the user needed to cut their entertainment costs, while price increases from the streamer in question were the third-most given response.
To differentiate themselves from cable and satellite, streaming platforms have allowed users to pay on a month-to-month basis with no contracts. Annual plans are an option, and often feature a discount over a monthly subscription rate, but not forcing long-term contracts on users was a key way for streamers to show that they were different from pay TV when the idea of streaming was just getting on its feet.
But that also means that users can easily sign up for a streamer to watch one specific title, then cancel before they are billed again. This behavior is called cycling, and it’s becoming more and more frequent; one survey found that 69% of Americans are considering cycling sometime in 2023.
DIRECTV’s respondents said they’d be most likely to return to a streaming service that offered a promotional discount or otherwise lowered prices with various content-related changes following in second and third.
Price concerns among customers are one key reason so many streaming platforms are offering ad-supported plans nowadays. Amazon is reportedly developing a tier of Prime Video that will include commercials, and if such plans come to fruition, all of the “Big Five” subscription video platforms (Netflix, Disney+, Hulu, Max and Prime Video) will have a cheaper, ad-supported option. Subscription plans with ads bring in more money per user than ad-free plans do, and they are usually available to consumers at a lower price point.
Amazon Prime Video
Amazon Prime Video is a subscription video streaming service that includes on-demand access to 10,000+ movies, TV shows, and Prime Originals like “The Lord of the Rings: The Rings of Power,” “Jack Ryan,” “The Marvelous Mrs. Maisel,” “The Boys,” and more. Subscribers can also add third-party services like Max, Showtime, STARZ, and dozens more with Amazon Prime Video Channels. Prime Video also offers exclusive live access to NFL Thursday Night Football.