Streaming Churn Rate Up 300% in 4 Years; Netflix Remains Least Canceled Platform
Streaming Churn Rate Up 300% in 4 Years; Netflix Remains Least Canceled Platform
Antenna’s latest State of Subscriptions report is outlining the effects of market saturation and rising prices in the streaming industry.
One of the biggest differences between cable and streaming is the ease with which streaming services allow their customers to cancel. Most streamers allow viewers to cancel their account with just a few mouse clicks, whereas cable companies charge exorbitant early cancelation fees and require customers to send back rented equipment or face even more financial penalties. New data released by subscription research company Antenna highlights the effects of increased competition, rising prices, and crackdowns on password sharing on streaming churn. The firm’s 2024 “State of Subscriptions” report demonstrates that the ease of cancelation on streaming services has led to a marked evolution in customer behavior.
- Antenna’s data shows that the weighted churn average has grown from 2% to almost 6% between 2019 and 2023.
- Gross additions and cancelations are both increasing, suggesting more and more customers are bouncing between streamers to save money.
- Serial churners now account for 23% of the total American streaming audience.
Antenna’s deep dive into the behavior of streaming customers has proven that viewers are far more likely to cancel their streaming services than they were in 2019. At that time, the average weighted churn rate of streaming providers was just over 2%. In 2023, that number was 5.5% with a year-over-year increase of 0.8%, and nearly three times as many customers who admitted to churning in 2019. Peacock improved its churn rate the most over that time, while STARZ saw the highest increase in rate.
When analyzing why the churn rate has grown so precipitously in the last few years, it’s hard to ignore the increase in the number of services available as well as increases in price. Ad-free subscription streaming prices rose 25% in 2023 alone, and as customer bills rise, their willingness to pay for all streaming services at once is falling.
As evidence of this, Antenna’s data shows that both gross additions and cancelations for streaming services are rising. This demonstrates that customers are canceling their streaming accounts at higher rates than before, but instead of leaving the streaming ecosystem, they’re simply signing up for another service. This puts pressure on streaming providers to not only attract as many new customers as possible but also to do whatever they can to keep the viewers they’ve already got.
In 2023, net streaming viewer additions only tallied 24.2 million, down more than 15 million from the year prior even though gross additions grew by nearly 20 million. Included in these numbers is also an increasing amount of people who leave a service only to return to it in a fairly short amount of time.
How Many Streaming Customers are Serial Churners?
One of the biggest problems facing consumers as streaming prices rise is that there’s more content available than ever before. Viewers now have 2 million+ titles to choose from, and that has created a growing audience segment who will sign up for a streaming service to watch a particular selection of titles and then cancel their subscription before being charged again. Antenna identifies any viewer who has canceled three or more premium streaming services in the past two years as a “serial churner,” and its numbers show that 23% of viewers now admit to belonging to this category, up from just 3% in 2019 when streaming services were cheaper and fewer in number.
The good news for streaming providers in Antenna’s data is that frequently, viewers who cancel their accounts end up resubscribing at some point. Across the premium subscription video-on-demand (SVOD) weighted average, 41% of viewers who canceled their subscription to a given service resubscribed to that streamer within 12 months. Peacock, Netflix, Disney+, Max, and Paramount+ all experience better-than-average win-back rates.
It is smaller streamers like discovery+, STARZ, and Apple TV+ that suffer the most in this regard, although there appears to be a cyclical, as resubscriptions take a noticeable leap after six months. Since Apple TV+ does not have the depth of content that its competing streamers do, it is especially susceptible to customers leaving the service after watching one series, only to return when there is something else that they are interested in streaming.
Can Streamers Do Anything to Cut Down on Churn?
The simple answer on how to reduce churn would be for streamers to add more desirable content. Not only is this much easier said than done when trying to determine audience preferences, but content additions to streamers also frequently mean the cost of those platforms has to increase; which in turn leads to a higher rate of churn for the streamer in question.
Antenna’s data points inescapably to the fact that the streaming industry needs to start bundling, and the sooner the better. Bundles allow viewers to access multiple types of content at a price point that’s usually significantly lower than what viewers would pay to get the streaming services incorporated in that bundle separately. For example, select Verizon Wireless customers can purchase a bundle of ad-supported Netflix and Max for $9.99 per month, which is the same cost as a standalone subscription to just Max. This bundle has a wide variety of content, including original entertainment Max and Netflix, plus live news and sports through Max’s CNN Max hub and Bleacher Report sports add-on.
Bundling increases the value of the services involved, making it less likely that customers will churn away since they feel they’re getting a good amount of content for their money. Bundled services also feature a higher rate of new releases, giving customers something new to watch more frequently and providing less downtime between big-name releases. According to one survey, more than 20% of viewers who canceled a streaming subscription last year did so because the title they wanted to watch had finished releasing new episodes.
The problem is not so much in getting streamers to see that bundling would be a good idea, but in getting them to agree to work with the competition in offering such bundles. But there are definite thaws in the ice in this regard; Disney, Fox, and Warner Bros. Discovery shocked the world when they announced they would combine their sports rights on a new streaming platform that would house full streams of their broadcast and cable channels. Paramount Global and Peacock have also reportedly discussed a combination of Paramount+ and Peacock, so it’s clear some providers are coming around to the idea of increased cooperation in the name of self-preservation.
As Antenna’s numbers show, the time is now for streamers to start bundling more actively or risk an onslaught of churn. Customers can no longer justify stacking streaming services while ignoring the rising costs, and bundling is the best way to ensure viewers stay engaged with a particular platform.
Peacock
Peacock is a subscription video streaming service from NBCUniversal that includes original shows, blockbuster movies, and classic television series. Peacock is home to “Yellowstone,” and “The Office,” as well as original hits like “Poker Face” and “Bel-Air.” You can also watch live sports including NFL, MLB, WWE, Olympics, Premier League, NASCAR, French Open, College Football and Basketball, and PGA Tour. Premium Plus subscribers can stream their local NBC feed in all 210 markets.