Very Few Streaming Customers Sign Up for Annual Subscriptions, Despite the Fact They Would Save Money
Very Few Streaming Customers Sign Up for Annual Subscriptions, Despite the Fact They Would Save Money
New data from Antenna helps to answer this question, and shows that streamers may want to start providing more meaningful annual discounts going forward.
Annual streaming subscriptions are undoubtedly a bit of a tradeoff. Data compiled by The Streamable's expert Matt Tamanini in 2023 showed that viewers could save almost $500 per year by choosing annual options for the various streaming services which offer them since they frequently charge customers for just 10 months instead of 12. However, annual plans take away the flexibility of canceling whenever viewers want since they require customers to pay for their entire subscription upfront. New data from Antenna shows that an incredibly small percentage of people opt for annual streaming plans, and lays out ways that services can get more viewers to choose annual subscription options going forward.
Key Details:
- Across 41 streamers measured by Antenna, the number of viewers who pick annual plans is just 4%.
- Streaming services’ annual plans offer discounts of around 15%-20%, much lower than the annual discounts of other types of subscription services.
- Antenna found that customers who sign up for Max annual plans at promotional prices are still more valuable to streamers than the average monthly customer.
According to Antenna’s data, the amount of viewers who prefer the flexibility of a monthly streaming subscription to the nominal discounts available with such plans is nowhere close to an even split. Between the first quarter of 2022 and the first quarter of 2024, the number of viewers subscribed to annual streaming plans hovered between 3% and 4%; the data was collected from across 41 streaming services measured by Antenna.
So why are more than 95% of customers choosing to go month-to-month, even if they get a discount via annual plans? Obviously, it’s cheaper to pay just $10 or so for one month of access to a particular streamer, which means services have to do a better job of ensuring viewers want to watch their content all year round. Monthly plans also help streamers stand apart from cable packages, which traditionally lock viewers into high-priced subscriptions for multiple years at a time.
However, streaming customers are willing to commit to services for longer terms if they find the value is good enough. Recent data from Aluma found that more than half of consumers would sign up for a bundle of five streaming services if it were priced sensibly enough, and Antenna’s numbers show that streaming services with annual plans are offering much lower percentage discounts than other subscription services.
For example, Max’s ad-free annual plan is $169.99 per year, a discount of 17% off what customers would pay to stay subscribed to the monthly option at $16.99 for 12 months. On the other hand, the meditation app Calm is $14.99 per month or $69.99 per year, a 61% discount off the price one would pay for the monthly plan for 12 months.
Do Steeply Discounted Annual Plans Create More Value for Providers?
The data from Antenna points to one inescapable conclusion: streamers should be making their annual plans more attractive through steeper discounts. There is a marked uptake in subscriptions to annual plans when a promotional price is offered; looking at Q1 data from 2024, 27% of annual plan sign-ups came during a price promotion, compared to just 4% of all subscription streaming sign-ups coming via a promotion in the same quarter.
Diving a little deeper, in 2022 Max (then HBO Max) offered a promotion to get viewers subscribed before the release of Season 1 of “House of the Dragon.” It discounted its annual plan by 40% off what monthly customers would pay for 12 months of service, and it grew its share of annual signups by more than five times.
Not only were more viewers subscribing to Max’s annual plan, but it made more money off those customers, even with the deeper discount. The group of customers who subscribed to Max’s annual plan at the special promo price had an average 18-month value of $186.71 each, higher than the 18-month monthly plan value benchmark of $122.48. In short, Max made more money off viewers who signed up for the discounted annual plan than it did off viewers who subscribed to the monthly plan for the same amount of time, even with the promo price.
This seems to point to the conclusion that streaming providers need to think seriously about giving deeper discounts for annual plans. Such discounts may mean taking a little less money from viewers upfront, but it will lead to a more engaged customer base. That could be a big help to streamers with ad-supported plans, and offering deeply discounted annual subscriptions to these plans could help streaming owners collect markedly greater ad revenues.
Whether Antenna’s data will lead more streaming services to actually lower the prices of their annual plans remains doubtful, but it should. For now, customers will continue to use the freedom provided by monthly subscription options to sign up for a service to watch a particular title, and then cancel that subscription before being billed again.
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.