Churn is to be expected, if not planned for nowadays, as the number of streaming services continues to increase, but the frequency of new and original content could definitely use some improvement. Plus, distributors spreading titles across multiple services doesn’t help either. According to Samsung’s new white paper, “The Streaming Index,” 39% of respondents say they unsubscribe from a streaming service based on the lack of original content, and 36% churn due to a lack of new content.
The following analysis is based on data from 45 million “opted-in” U.S. Smart TVs on Samsung and a survey of 1,000 adult Samsung Smart TV users.
Other than the need for original and new content, cost is also considered a major contributor to churn. Thirty-six percent of respondents said that their reason for canceling a particular streaming service was that it was too expensive. One of the main issues that services are battling right now is making subscribers feel like they are getting enough content for their investment, which is why we recently asked, “Is Bundling, Merging the Answer to Streaming’s Retention Issues?”
According to Parks Associates, it only gets worse from here. In its 2022 “OTT Streaming Trends to Watch” white paper, their data shows that the average churn rate was 40% in 2020. Right now, the average is 45%.
Deloitte Global also fears the worst as the media analysis firm has warned the global subscription streaming market that it will have such high churn rates that services will experience 150 million SVOD cancellations 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.”
It’s common for viewers to hold on to the services that they use the most — perhaps Netflix and Hulu — and jump from one to another for specific series, Peacock for “Yellowstone” or Apple TV+ “Ted Lasso,” only to cancel those subscriptions when the specific season is over. Thus, the number of subscriptions may rise and fall over time, normalizing churn in 2022.
According to a report by Hub Entertainment Research, roughly half of U.S. viewers left in six months after subscribing to Disney+ after “Hamilton” was released in summer 2020, just as subscribers of HBO Max who only joined for “Wonder Woman 1984.”
Major corporations have bet their brands on the success of their streaming ventures. More than one hundred billion dollars was spent on content last year. Is it enough to satisfy consumers?
So what really is motivating viewers to stick with a streaming service? In a nutshell, user experience, content, and buzz.
“Essentially, it is all trial and error,” Neil Begley, senior vice president at Moody’s Corporation said. “You never really know until the audience gets a look at it as to whether or not it’s going to resonate. And I think everybody is throwing a lot of spaghetti against the wall, and figuring out which is going to stick and run with it
“The entertainment streaming wars is alive and well. I’m sure that all of these companies will push the envelope on content. Netflix is successful in bringing in stories that have been popular in other countries and dubbing it and then distributing it around the world like, ‘Squid Game.’ That really sets the tone for everyone else.”
The biggest key, however, is having frequently updated content and having content available that was missed when it was live (such as The Winter Olympics recap segments on Peacock).
While some services lean on reboots or already established IP to draw in viewers, such as Paramount+ and Disney+ with tons of spinoffs, reboots, and other titles based on recognizable characters, others try to stay out of the confined content box, coming up with original and unique series such as Netflix with “Squid Game.”
Either way, if there isn’t enough new content keeping people interested every month, viewers will get bored and bounce.
Additionally, viewers are susceptible to social influence and are drawn to what is being watched the most, demonstrating that the proverbial water cooler remains critical. HBO Max’s “Euphoria” exploded all over social media, garnering a fan base that no amount of glitter stores could ever anticipate. Other shows with loyal watchers include “Yellowstone,” “Bridgerton,” “Peaky Blinders,” “The Mandalorian,” and many more.
All in all, when choosing a service, audiences value fresh, one-of-a-kind, and frequently updated content.