Subscribers Who Stay with a Streamer for 1 Year Are Half as Likely to Cancel Their Subscription
New analysis from Antenna reveals the time frame in which customers are most likely to cancel their streaming subscriptions.
At a certain point, a streaming service just becomes too engrained a part of your life to let it go. Eventually, a streamer becomes an indispensable part of a viewer’s entertainment ritual that they can’t do without it, but just exactly where is the tipping point between discardable and necessary? Providers who have watched the industry average churn rate rise 300% in the past four years would surely like to know, and new data from Antenna demonstrates that customers who stay signed up to a streamer like Disney+ or Max for a year are much more likely to stick with it in the long term.
- Subscribers in their second year with a streamer are less than half as likely to cancel than viewers who are in their first year.
- Customers are most at risk of canceling subscriptions within their first three months.
- Netflix has the lowest churn rate in the industry as of December 2023.
Antenna’s research shows that while streaming services are always aiming to keep customers subscribed, they should be especially trying to keep them signed up for at least one year. According to the data, customers who are in their first year of a streaming subscription are churning at an average rate of 8.6%, whereas those in year two of their tenure churn at a rate of just 4%. That’s a drop of more than 50%, and it continues declining the longer that viewers are subscribed to a particular service.
Viewers who stay with a streaming service for a year are simply more likely to think of that service as indispensable. They’ve grown accustomed to its user interface, its release schedule of new shows, and are familiar enough with its library content to justify continuing to pay for it once they’ve burned through whatever new release they want to binge.
Netflix is an industry leader in many facets, including subscriber total and net profitability. It’s no surprise that the world’s largest streaming service also leads with the lowest churn rate in the industry as well. As of December 2023, Netflix’s churn rate was just 2%, and a majority of its subscribers had been with the streamer for four years or longer, a customer segment that cancels at a rate of just 1.9%, according to Antenna’s data.
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Antenna’s research also shows that as of the end of 2023, 39% of premium subscription video-on-demand (SVOD) subscriptions are in their first year of tenure. Removing Netflix and its low churn rate from the equation, the figure jumps to 45% of customers that are in their first year of service with a given SVOD, a time period when they consumers are most likely to cancel their subscription.
This indicates that nearly half of all streaming subscribers who signed up for a service other than Netflix in the last year are at an elevated risk of canceling. However, this does not mean that they’re at risk of leaving streaming video behind; Antenna data also shows that 41% of viewers who cancel a streaming service resubscribe to that service within 12 months. Peacock, Netflix, Disney+, Max, and Paramount+ all experience better-than-average win-back rates.
Other recent studies reveal that consumers are also turning to ad-supported streaming services more frequently to fill in entertainment gaps left when they cancel an SVOD service. Research from Omdia indicate that customers watch as many as six free sources of video every month, including social video platforms like YouTube and TikTok. The number of paid streaming services the average customer stacks has dropped to around three, demonstrating that viewers are being more and more choosy about which services they stick with as prices rise.
These numbers from Antenna show streaming providers that there’s a clear path to customer loyalty: retaining them for a year or longer. This leads to a much lower cancelation rate among customers, so the challenge for streaming service owners becomes how they keep customers engaged for 12 months in a row.
Max
Max is a subscription video streaming service that gives access to the full HBO library, along with exclusive Max Originals. There are hubs for content from TLC, HGTV, Food Network, Discovery, TCM, Cartoon Network, Travel Channel, ID, and more. Watch hit series like “The Last of Us,” “House of the Dragon,” “Succession,” “Curb Your Enthusiasm,” and more. Thanks to the B/R Sports add-on, users can watch NBA, MLB, NHL, March Madness, and NASCAR events.