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‘Churn and Return’ Streaming Becoming More Common Among Younger Viewers

Lauren Forristal

You can be honest. You’ve canceled a subscription before. Whether due to financial reasons or simply because the selection wasn’t cutting it anymore, you aren’t the only one who has said, “peace out” to a streaming service. But some viewers aren’t leaving forever. “Churn and return” is becoming more common, especially for younger generations.

Deloitte, a consulting firm, reports from their latest Digital Media Trends study that 47% of Millennials and 34% of Gen Z in the U.S. have canceled and then resubscribed to the same streaming platform within that same year. Gen X has a somewhat lesser rate of 25%, whereas Boomers (6%) and Matures (3%) have significantly lower rates. Another reason why Gen Z might have higher streaming churn rates — these consumers are ranking video games as their #1 preferred form of enjoyment during their free time.

With millions of online content options and various forms of entertainment to choose from, younger viewers have more options and limited time. It’s no wonder that streaming services are having trouble keeping their attention. And as more streaming options appear, consumers may simply allocate their budgets to whatever service has the hottest show or newest movie this month, then jump to another service in the next month.

Although we may not know the specific reason that each and every viewer has for clicking ‘cancel,’ we do know what streaming services have gotten the biggest hit from this churn problem.

This year, Peacock has definitely been hit the most, along with Pluto TV, Crackle, and Tubi. In a recent study from Kantar Entertainment on Demand Peacock lost 13% of its paying subscribers between Q1 and Q2 of 2021. While it was a 15% improvement from the churn rate in Q1, there was a surprising 9% churn increase for the free ad-supported plan as well. That means nearly 1-in-10 Peacock users wouldn’t even stay for a free product. Additionally, Pluto TV and Crackle saw a 2% increase, and Tubo saw its churn go up 3%. Churn may be less concerning for a free service, but it’s an industry-wide issue.

Viewers of all ages, however, have given Netflix the trophy this year as a worthy contender for their money. Wurl Analytics illustrates that Netflix has an industry-best churn rate of 2%. Hulu and Disney+ results were a little bit higher, with both rates at 4%. Netflix has done this before and it’s mostly due to their original content (which makes up 83% of its platform).

Rising churn rates may also explain why more services are willing to offer discounted annual plans. Keeping a subscriber for a full year may be worth the marginal revenue hit.

It’s hard to predict churn-and-return rates, but it’s up to streaming service companies to provide newer and unique content that will convince Gen Z and Millennials to stick around for the yearly/monthly payment.

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